Norges Bank rate path expected to remain unchanged – Nordea

Slightly higher core inflation and energy prices contrast with a stronger NOK and weaker retail sales, according to Nordea’s Kjetil Olsen. Against this mixed backdrop, he expects Norges Bank to leave its key policy rate at 4.5% next Thursday, consistent with September’s projected rate path. Olsen sees little change in the bank’s communication and considers rate cuts unlikely until inflation is clearly converging towards the 2% target, something he does not expect before 2028.

Norges Bank expected to hold rates pending clearer inflation progress

"Norges Bank will keep its key rate unchanged at 4.5% next Thursday, in line with the rate path presented at the September meeting."

"In addition, oil and gas prices have risen, as have electricity futures."

"On the other hand, the stronger NOK points in the opposite direction."

"Overall, if Norges Bank were to publish a new rate path today, we believe it would be very close to the September path at the front end, perhaps marginally lower, but somewhat lower further out."

"We believe Norges Bank needs to see clear evidence that inflation is converging towards the 2% target before signalling rate cuts."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)