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Norway: Rates Held At 4.5% (Consensus 4.5%) in Mar-25

• The Norges Bank held the policy rate at 4.5%, consistent with expectations, as inflation accelerated to 3.6% in February, well above prior forecasts, prompting delays in the signalled rate cuts.
• Strong wage growth, broad-based price pressures, and resilient domestic activity led the Committee to judge that a restrictive policy stance remains warranted for longer.
• The policy rate is now projected to fall to 4.0% by year-end, but heightened uncertainty around inflation and global trade developments will shape the timing and extent of future easing.

Chile: Policy Rate Held At 5.0% (Consensus 5.0%) in Mar-25

• The Central Bank of Chile held the policy rate at 5%, as expected, reflecting caution due to persistent inflation risks despite stronger-than-forecasted economic activity and improved financial conditions.
• External uncertainty has intensified, with geopolitical tensions and US trade protectionism contributing to divergent market reactions and a global dollar weakening, supporting Chile’s terms of trade.
• Domestic inflation remains elevated, and expectations are not yet fully anchored, prompting the Board to maintain a data-dependent stance focused on securing inflation convergence to its 3% target over two years.

SNB: 25bp Rate Cut To 0.25% (Consensus 0.25%) in Mar-25

• The SNB lowered its policy rate by 25bps to 0.25%, in line with expectations, citing low inflation and downside risks to price stability. Inflation is projected to remain within the central bank’s target range, reducing the need for aggressive monetary easing.
• Switzerland’s economy remains resilient, with solid Q4 2024 growth, but global uncertainties—including geopolitical tensions and trade risks—could pose challenges. Domestic demand is expected to benefit from rising real wages, while weak foreign trade may dampen overall growth.
• Future policy decisions will be data-dependent, with the SNB closely monitoring inflation and external conditions. While further easing is possible, ongoing global inflationary pressures and fiscal stimulus in Europe could influence the central bank’s stance.

BoE Dove Beaten Into Submission

• The BoE unsurprisingly held its policy rate at 4.5% in March, preserving its gradual easing path after resilient recent data. Only one MPC member dissented for a 25bp cut.
• Catherine Mann did not carry the extra 25bp of easing she supported from February to March. Her hyperactive vote relied on so little spurious evidence it was swiftly falsified.
• Core members emphasise the lack of a predetermined path, raising the hurdle to a May cut, but this remains the most likely outcome, even if it may require a rapid reversal.

By Philip Rush