Norges Bank holds policy rate at 4.25%, signals more tightening ahead

Norway's central bank, Norges Bank, maintained its policy rate at 4.25% on Thursday, in line with market expectations. The bank signaled further rate hikes were likely in the future. The Norges Bank pointed to two recent weak consumer price index reports in its statement, expressing caution about concluding a change in the underlying inflation trend.

The central bank had previously noted declining capacity utilization rates, implying slower inflation ahead. The bank emphasized that it does not want to overburden the economy with additional tightening measures. These remarks were reiterated in Thursday's announcement. The bank indicated that one more rate increase this year is the most probable scenario unless additional evidence emerges that inflation is decreasing steadily towards the target rate. The next Consumer Price Index report is set for September 10.