Several economists have believed that the expected interest rate increase today will be the last in this round. Somewhat lower price growth in November and signs of a cooling of the Norwegian economy have been the main arguments. But central bank governor Ida Wolden Bache and the rest of the Norges Bank board will tighten the interest rate screw before mortgage borrowers see the end of the hikes. There will most likely be another jump of 0.25 percentage points in March and then we will be up to a policy rate of 3 percent. The lending rate to customers will then be 4.3 per cent. – The forecasts for the Norwegian economy are more uncertain than normal, but if things go as we now believe, the policy rate will be around 3 per cent next year, says central bank governor Ida Wolden Bache. There could be new interest rate jumps in March and June – Also, 50/50 is for another interest rate jump in June, says chief economist at Sparebanken1 Markets. Harald Magnus Andreassen. – The Norwegian economy is in much better shape than Norges Bank expected, and unemployment is still at record low levels (1.6%). The price increase is also high and thus there is a need for more interest rate increases, says Andreassen. MORE RATE JUMPS: Fifty percent likely with interest rate jumps in both March and June, says Chief Economist Harald Magnus Andreassen at Sparebank1 Markets. Photo: Lise Åserud With today’s interest rate increase, we have an interest rate level of 2.75 per cent, the highest since 2009. The aim is to curb price growth, which was 6.5 per cent in November. Norges Bank rules according to an inflation target of 2 per cent Must avoid price inflation sticking to a high level Chief Economist at DNB Markets Kjersti Haugland is not surprised by the signals of further interest rate increases. – Although price inflation has reached its peak, it is Norges Bank’s task to ensure that it does not remain at too high a level. That implies at least one more interest rate jump. The Norwegian economy is also gaining momentum, and is perhaps better than some company surveys show, says Haugland. AS EXPECTED: Kjersti Haugland in DNB Markets believes that Norges Bank’s job now is to ensure that inflation does not get stuck at a high level. Photo: Thomas Wi Haugland also believes that the key interest rate can be set at 3.25 per cent next year, but it depends on how, among other things, prices develop after the New Year.
ttn-69
Norges Bank raises interest rates – news Norway – Overview of news from various parts of the country
