Central bank governor Ida Wolden Bache continues to tighten the interest rate screw. The interest rate hike of 0.25 percentage points is almost a breath of fresh air, after two double interest rate hikes in a row at the two previous interest rate meetings. The interest rate is now 2.5 per cent, which means that those who have a mortgage will soon receive a mortgage interest rate below 4 per cent. The consolation is that it will soon be over. Norges Bank is probably only two interest rate hikes away from the peak. Stops at 3 per cent As it stands now, the key interest rate will stop at around 3 per cent during the winter. The mortgage interest rate will then end at 4.5 per cent, according to Norges Bank’s monetary policy report from six weeks ago. It has gone at a furious pace from zero to now. The first interest rate hike since the zero interest regime during the pandemic came in September last year. Today’s rate hike is the seventh in a row since then. For the vast majority, the combination of rapid interest rate hikes, food price increases of over 10 per cent annually and record-high stocking stuffers has required a personal financial adjustment that will go down in the history books. Just on the increase in interest rates from 0 to 2.5 per cent, Norwegians, who have well over NOK 4,000 billion in debt, have had a total of around NOK 100 billion withdrawn from their budgets in increased interest payments, if tax is not taken into account. Soon over But now the frequent austerity measures will soon be over. Norges Bank now notices that there are signs of a cooling-off in the economy. Nevertheless, there is still high activity, galloping prices and extremely low unemployment. That alone could have been enough to raise interest rates twice as much at this meeting. Nevertheless, Norges Bank chooses to wait, and would rather proceed more gradually in raising interest rates. The interest rate weapon is rarely strong in Norway, where almost everyone has a floating interest rate on their mortgage. This means that the interest rate changes hit people’s wallets very quickly. In the US, where far more people have fixed-rate loans, the interest rate weapon is not as effective. In that sense, we can perhaps be happy that Norwegians have a penchant for taking out mortgages that they have no idea how much it will cost during the loan period. Not as dramatic If you compare it with the level of the key interest rate before the pandemic, the rise in interest rates over the past year does not look as dramatic. When we closed down society in March 2020, the key interest rate was 1.5 per cent, i.e. only one percentage point lower than it is today. In a historical perspective, the interest rate is not particularly high either. It is possibly a meager consolation for everyone who is now getting tighter. The interest rate is now 2.5 per cent, which means that those who have a mortgage will soon receive a mortgage interest rate below 4 per cent. Photo: Heiko Junge / NTB Great contrast The contrast is great with when the interest rate was set to zero in the corona spring of 2020. Everyone who was still in work got an enormous boost in purchasing power. The interest payments were shaved off by many thousands of Swedish kroner each month – at the same time that we had fewer things to spend the extra money on. No travel, no restaurants and no cultural experiences. Instead, there were tents, canoes and new skis. It is not impossible that some of all these things will now come to Finn. Those who would rather use the extra money to buy things, rather than put some aside for the interest rate hikes that have been constantly being announced, may regret it a little now. It is, as you know, much easier to suddenly get good advice – than bad.
ttn-69
Now she will soon be finished – Statement
