Norway’s central bank held the policy rate at 4.5% in an interim meeting, in
line with market expectations, and reiterated it would raise rates again if
necessary to curb inflation. The bank did not update economic forecasts or its
rate path. Policymakers framed the pause as a hawkish hold amid a renewed global
tightening cycle and an escalation of conflict involving Iran that is adding
upside price pressure. The bank delivered its second rate hike this year in
September and said borrowing costs may need to remain high for a period to
return inflation to the 2% target. Norway’s mainland economy is still expanding,
wage pressures are likely to ease only gradually, and a potentially more
expansionary budget next year from the minority Labor government and its allies
could further add to inflationary pressures.
