Norges Bank raises key interest rate to 0.75% – announces seven further increases

Ida Wolden BachePhoto: Ole Berg-Rusten / NTB
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Norges Bank is raising the key interest rate by 0.25% – to 0.75%. Seven new interest rate hikes are announced.

The central bank announced the rise in the key interest rate on Thursday morning. The decision of Norges Bank’s Monetary Policy and Financial Stability Committee was unanimous.

“As we now assess the outlook and the risk picture, the key policy rate will most likely be raised further in June,” Norges Bank’s Ida Wolden Bache stated in a press release.

The key interest rate has been 0.5% since the bank’s interest rate meeting in December last year. When the interest rate hike was put on hold in January, Norges Bank signaled that it would most likely rise this March.

Forecast of a larger increase in the future

Norges Bank also signals that the key policy rate will be raised to around 2.5% by the end of next year. That means seven additional interest rate hikes.

The forecast for the key policy rate is higher than in the previous monetary policy report. 

Activity in the Norwegian economy has continued to increase after the infection control measures were removed this winter, and employment has increased. 

Capacity utilization in the economy appears to be above a normal level. Despite the uncertainty that accompanies the war in Ukraine, it appears that the upswing in the Norwegian economy will continue, the central bank believes.

Wage and price growth have been higher than projected, and wage expectations have increased. Rising wage growth and higher price growth for imported goods are expected to lift underlying inflation going forward.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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