Norway central bank lifts interest rate by 50 basis points

Norway’s central bank hiked on Thursday its benchmark interest rate by 50 basis and announced another potential increase in September as inflation lifts, according to bank’s statement.

Norges Bank’s monetary policy committee increased the sight deposit rate from 1.25 to 1.75 percent exceeding its prior forecast in June.

“A markedly higher policy rate needed to ease the pressures in the Norwegian economy and to bring inflation down towards the target”, says governor Ida Wolden Bache.

Norwegian inflation hit an annual 4.5 percent in July increased from 3.6 percent in June and well ahead of consensus projections for 3.8 percent.

The increase and high inflation may rest the housing market and curb household consumption faster than currently envisaged, the statement added. There is also a risk of a sharper slowdown in global growth.