Most expensive pound in 24 years – news Norway – Overview of news from various parts of the country

Currency strategist Nils Kristian Knudsen at Handelsbanken Markets informs news that the Norwegian kroner has not been weaker against the British pound in 24 years. DN reported the news first, and refers to data from Bloomberg. The newspaper writes that you have to go back to April 2000 to find the last time the pound was at similar levels. Figures from Infront show that a British pound currently costs NOK 14.03 in the foreign exchange market. It is the combination of a Norwegian krone that has weakened significantly following last week’s inflation figures and a British currency that has strengthened in the wake of the UK election that is the cause. – The British economy has fared better than many had thought, and you can see the effect of the change of government and relative to what is happening in other countries such as France. One expects increased stability in Great Britain in the wake of the election, he says. Interest rate and currency strategist Nils Kristian Knudsen at Handelsbanken markets. Photo: Handelsbanken On 4 July it became clear that Labor took over power after 14 years of conservative rule. In the financial markets, an interest rate cut in Great Britain has not been priced in until late autumn. – There is no longer only focus on Brexit and weak productivity, as has been the case for several years. The outlook for Britain’s economy has changed, he says. Krone weakening after lower growth in consumer prices The Norwegian krone has weakened sharply in the wake of falling interest rate expectations following the price growth figures that came in last week. Price inflation weakened for the sixth consecutive month. – Price growth has moderated every month for half a year now. The twelve-month growth in June is the lowest we have seen in over three years, said Espen Kristiansen, head of section at Statistics Norway, in connection with the figures being presented. In June, NB announced that the first interest rate cut was not expected to come until March next year. But. The interest rate market has priced in both a faster and greater rate cut than what Norges Bank has assumed in its latest monetary policy report. Headache for Norges Bank – When the krona weakens as much as it is doing now, it creates a challenge for Norges Bank in the sense that it raises the interest rate path again. At the top, it could contribute to a new interest rate hike, says currency strategist Knudsen at Handelsbanken. Norges Bank has previously communicated that the central bank is prepared to raise the key interest rate again if inflation rises more than expected, or if the krone weakens more than what is based on the forecasts. – That is where we stand now, he says. Published 16.07.2024, at 15.16



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