No faith in having new cuts in interest rates

Norges Bank mortgage policy rateNorges Bank (Bank of Norway), Headquarters Photo: Norges Bank

Clearer outlook for the Norwegian economy, stable unemployment, strong house prices and high inflation. There are reasons why experts believe interest bottomed out in Norway.

– I think interest rates will be unchanged, says economics professor Steinar Holden at the University of Oslo to news agency NTB.

The Norges Bank’s Executive Board will decide on Thursday whether the policy rate will be further reduced from the current level of 0.5 percent or not.

– There is nothing better in the Norwegian economy than Norges Bank expected, partly as was shown in the latest report from the regional network. House price growth can also talk of higher interest rates, but this is less important, adds Holden.

He also has doubts about a cut later this year.
– As it looks, I do not think there will be cuts in December but if the economy deteriorates, it may still happen, he said.

Weaker oil brake

Before the summer, Norges Bank clearly stated that there would come new interest rate cuts during 2016 but since then, the positive news stood in line for the Norwegian economy.

Unemployment appears to have stabilized, drop in oil investment is not as strong as before and growth forecasts for the coming years has been revised.


Source: NTB scanpix / Norway Today