Sparebank 1 Nord-Norge is the first to raise mortgage rates

Sparebank 1Photo: Lise Åserud / NTB

Sparebank 1 Nord-Norge is the first to raise mortgage rates after Norges Bank raised interest rates on Thursday, according to E24. The increase is up to 0.25%.

On Thursday, Norges Bank raised its key interest rate by 0.25% to 0.75%. The central bank also announced a further seven interest rate hikes by the end of 2023.

“As we now assess the outlook and the risk picture, the key policy rate will most likely be raised further in June,” Central Bank Governor Ida Wolden Bache told NTB on Thursday.

Up to 2.5% in 2024

Norges Bank signaled that the key policy rate would be raised to around 2.5% by the end of next year. This means seven interest rate hikes of 0.25%: a further three in 2022 and four in 2023.

These forecasts are higher than they were in the previous monetary policy report and are above what is estimated as a neutral level of the key policy rate.

The background is that activity in the Norwegian economy has continued to increase after the infection control measures were removed this winter, and more people are working. In addition, Norwegian business is doing well, and it appears to be above a normal level. The central bank believes that the upswing in the Norwegian economy will continue despite the war in Ukraine leading to uncertainty.

Forecasts are subject to change

Higher interest rates will help ease the pressure on the Norwegian economy, but there are prospects that unemployment will remain low. 

Uncertainty about economic developments and how households adapt to a higher interest rate level indicate that interest rates will gradually rise. If there is a more lasting high price increase, the interest rate can be raised faster.

“This interest rate path is a forecast and not a promise. If the outlook were to change, the interest rate path could change, and the pace of interest rate hikes would be different,” Bache said on Thursday.

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

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