Norway’s central bank will raise interest rates again this year, but economists disagree on when the next move will come. The debate centers on whether the bank will act at its June meeting or wait until the autumn.
Norges Bank has raised rates six times since September 2021 to curb inflation, which peaked at 6.7% last year. The bank’s own projections suggest further tightening is needed, but market expectations have shifted. Some analysts point to weaker economic data in recent months as a reason to pause.
DNB Markets chief economist Kari Due-Andersen expects a rate increase in June. She cites persistent inflation in services and a tight labor market as reasons for action. “Wage growth remains high, and that keeps pressure on prices,” she said. Others, like Nordea’s economist Sondre Solheim, argue for a delay until September. He notes that household debt levels and slowing housing activity could hurt consumer spending if rates rise too soon.
The bank’s regional network reports show businesses expect higher costs but also rising uncertainty. Governor Ida Wolden Bache has said policy will depend on incoming data. The next inflation figures are due on May 10, which could sway the decision.
A rate hike in June would mark the seventh increase since 2021. Analysts say the bank’s next move will hinge on whether inflation cools enough to justify a pause.
Source: e24.no