Central Bank holds rates in June

At its meeting on 19 June, Norges Bank decided to keep the policy rate unchanged at a 16-year high of 4.50%. The decision was unanimous and had been priced in by markets.

The hold was driven by concerns about inflation running above Norges Bank’s 2.0% target. Although inflation has been slightly lower than projected and unemployment has increased as expected, improved business prospects and anticipated higher wage growth suggest that inflation may remain higher for longer than previously projected.

Norges Bank’s forward guidance indicates that if the economy evolves as currently envisaged, the policy rate will remain at 4.50% until the end of the year and then be gradually reduced. This is based on projections that inflation will decline further, approaching its 2.0% target by the end of 2027. However, the policy rate could be adjusted if economic conditions deviate from expectations. Indeed, virtually all of our panelists still see room for the rate to be lowered this year. The next policy meeting is scheduled for 14 August.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Norwegian interest rate projections for the next ten years from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Norwegian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Norwegian interest rate projections.

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