Sjeføkonom etter undersøkelse: – Norges Bank kan heve renten

The latest economic report from the Norwegian Central Bank (Norges Bank) hints at a potential decision to raise interest rates by next Thursday. The report serves as the final piece of the puzzle before the interest rate decision. Economists have been divided on whether Norges Bank will lift the policy rate to 4.5 percent or keep it unchanged at 4.25 percent.

The report provides insights into business expectations regarding activity, prices, and wage developments. According to the report, Norges Bank might consider raising rates following the latest findings.

Prior to the report's release, the market speculated a 44 percent chance of a rate hike, according to Bloomberg. The report indicates stable growth, with 0.3 percent growth in both the current and next quarters, aligning with Norges Bank's expectations. The picture is complex, as household incomes are rising, investment in defense and data centers is increasing, while the construction sector continues to struggle.

Overall, growth is nearly stable and slightly below trend, with capacity utilization decreasing, which Norges Bank has accounted for in their estimates. The central bank aims for price growth that averages 2 percent over time, combined with low unemployment. A report from the Statistics Norway (SSB) last week showed that inflation in August was 3.3 percent higher than the same period in the previous year.

While price growth has exceeded the target, it was lower than Norges Bank's projections. The core inflation has been lower than expected but remains stuck at 3 percent, a persistent issue for Norges Bank.