Archive

November 06, 2025
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Inflation Persistence Constrains Norges Bank

  • The Norges Bank held rates at 4% as expected. Core inflation at 3% constrains further cuts despite emerging economic slack in the coming year.
  • Governor Bache stressed the bank is "not in a hurry" to cut rates, projecting one reduction annually through 2028. Cuts depend on disinflation progressing as forecast.
  • December's new forecasts will be critical—faster disinflation or sharper labour market weakness could accelerate cuts, while persistent inflation could keep rates higher for longer.
September 18, 2025
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Norway's Hawkish Cut Slows Rate Path

  • The Norges Bank cut rates 25bp to 4% as expected, but signalled slower easing than June projections, revising the rate path 20-40bp higher across 2026.
  • Committee projects one rate cut annually for three years to a terminal rate above 3% by 2028, reflecting stronger growth and persistent inflation pressures.
  • The decision balances economic support with anti-inflation credibility amid trade uncertainty and 4.5% wage growth expectations, constraining future cuts.
August 14, 2025
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Norway: Holds Steady on Easing Path In August

  • Norges Bank unsurprisingly held rates at 4.25% as expected, maintaining a restrictive stance while inflation persists above 2% target.
  • The central bank signals 1-2 more cuts as likely in 2025 if the economy evolves as projected, with a September reduction widely anticipated by markets.
  • Trade policy uncertainty and sticky services inflation create upside risks, but the gradual normalisation path remains intact barring shocks.
June 19, 2025
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Norway: 25bp Rate Cut To 4.25% (Consensus 4.5%) in Jun-25

  • The Norges Bank unexpectedly reduced its policy rate to 4.25%, defying consensus expectations for a hold, citing a faster-than-anticipated decline in underlying inflation and increased economic slack.
  • The Committee signalled that, if the economy develops as projected, further gradual rate cuts are likely in 2025, but emphasised that policy will remain restrictive until inflation is sustainably on target.
  • Future rate decisions will be highly data-dependent, with the Committee closely monitoring domestic wage and price dynamics, labour market conditions, and external risks such as geopolitical tensions and global trade policy uncertainty.

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