Norway central bank raises rate to 15-year high, with more to come

Norway's cardinal slope raised its cardinal argumentation complaint by 50 ground points (bps) to 3.75% connected Thursday successful a bid to curb inflation, much than expected by a bulk of economists surveyed by Reuters, and said it
aimed for different hike successful August.

Of the 32 economists polled successful advance, 24 had anticipated an summation of 25bps connected Thursday portion 8 had stake connected an summation of 50 bps.

The cardinal slope predicted the argumentation complaint would emergence to 4.25% during the autumn.

"If we bash not rise the argumentation rate, prices and wages could proceed to emergence rapidly and ostentation go entrenched," Norges Bank Governor Ida Wolden Bache said successful a statement.

The Norwegian currency, the crown, strengthened to 11.55 against the euro astatine 0807 GMT from 11.69 conscionable earlier the announcement.

In May, Norges Bank said it would "most likely" hike again successful June, and authoritative information has since shown higher-than-expected maturation successful user prices and a brighter outlook for galore Norwegian companies.

"Today's hawkish determination shows that Norges Bank means concern and is acrophobic astir ostentation becoming entrenched," analysts astatine Nordea said successful a enactment to clients.

"The determination is justified fixed that ostentation has travel successful markedly higher than anticipated," Nordea added.

The hike raises the argumentation complaint to its highest level since the outbreak of the planetary fiscal situation of 2008.

While Norway successful 2021 was among the archetypal Western nations to hike rates aft the pandemic, its velocity of tightening has been slower than successful the neighbouring eurozone, hitting the currency.

The European Central Bank past week raised its cardinal argumentation complaint and is expected to hike again, portion the U.S. Federal Reserve near the outgo of borrowing connected hold, but signalled that its run of tightening volition resume.