The decision to keep the key interest rate unchanged was in line with what the experts expected beforehand. – As we now assess the outlook, the key interest rate will probably be raised in December. Towards the meeting in December, the committee will receive more information about the price outlook. If we become more certain that the underlying price increase is on the way down, the interest rate can be kept calm, says Central Bank Governor Ida Wolden Bache. In the last monetary policy report from the central bank in September, the interest rate committee said that the key rate would most likely be raised once more, in December. But the language used in today’s press release is a little more subdued than in the last monetary policy report. Inflation becomes a joke The interest rate committee says in its justification that if the bank becomes more certain that the underlying inflation is on the way down, the key interest rate can still be kept steady. – The committee’s assessment is that the interest rate is now close to the level that is necessary to overcome the rise in prices, says the governor of the central bank. Nordea markets writes in a comment on the interest rate decision that the brokerage now expects that a possible new interest rate increase in December may be called off. Handelsbanken also says that, after today’s interest rate decision, it is slightly less likely that another interest rate jump will occur in December. The exchange rate of the Norwegian krone has been weaker against its trading partners than when the central bank presented its latest economic analysis. Sharp drop in price growth for several months in a row The latest published figures for price growth from Statistics Norway show that the 12-month growth in prices increases almost three times as much as the target, if we look at the so-called core inflation. It is the increase in the price of consumer goods if you remove changes in the price of electricity and fuel as well as changes in taxes. Growth in the consumer price index was 3.3 per cent at the last measurement. In the last three months, the price increase on consumer goods has fallen sharply. The next publication of new figures for consumer prices from Statistics Norway is 10 November. 13 interest rate jumps in two years Since the autumn of 2021, like other central banks, Norges Bank has raised its key interest rate sharply. During the pandemic, the key interest rate in Norway was set to zero. Due to high price growth, the central bank has raised the key interest rate a total of 13 times in the last two years. The central bank governs interest rate policy according to a politically determined target that price growth, measured by growth in consumer prices over time, should be 2 per cent a year.
ttn-69
There may be another interest rate jump in December – news Norway – Overview of news from various parts of the country
