Nordea economists Kjetil Olsen and Sara Midtgaard expect Norges Bank to leave the policy rate at 4.25% at next week’s meeting. They highlight that June core inflation was well below the Bank’s projection and see July data remaining subdued. With unemployment and the Norwegian krone broadly in line with forecasts, they anticipate no immediate move while awaiting more inflation evidence.
Rate decision preview and inflation
“We expect Norges Bank to leave the policy rate unchanged at 4.25% next week.”
“With inflation clearly below Norges Bank’s forecast, and with both unemployment and the Norwegian krone broadly in line with the June projections, a revised rate path produced today would likely be lower than the one published in June.”
“We therefore expect Norges Bank to keep the policy rate unchanged next week and wait for more evidence on underlying inflationary pressures.”
“That said, we still expect Norges Bank to deliver one further rate hike this autumn.”
“As a result, there is a good chance that the gap between actual inflation and Norges Bank’s projected inflation path will narrow significantly following the August inflation release.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
