AP

Norway’s central bank raises key policy interest rate

Dec 15, 2021, 12:43 PM | Updated: Dec 16, 2021, 5:35 am

COPENHAGEN, Denmark (AP) — Norway’s central bank announced Thursday that it raised its key policy interest rate from 0.25% to 0.5%, citing the upswing in the economy that it said was likely to continue.

If the growth continues, the bank is expected to make more rate increases next year, officials said.

“There is considerable uncertainty about the evolution of the pandemic and its effects on the economy. But if economic developments evolve broadly in line with the projections, the policy rate will most likely be raised in March,” Norges Bank Governor Oeystein Olsen said Thursday.

News of the rate increase, which takes effect Friday, comes the same day other central banks issued mixed decisions amid high inflation and worries about the new omicron variant of the virus. The Bank of England also raised interest rates, while European Central Bank took a cautious approach on phasing out its pandemic stimulus.

Olsen noted that in recent weeks, the number of new COVID-19 infections and hospitalizations have reached a new peak since the beginning of the pandemic. That, along with restrictions to curb the spread of the virus, were expected to hurt economic activity in the short term, Olsen said.

“When infection rates subside further out and containment measures are eased, the economic upswing will likely continue,” he said. “Rising wage growth and higher imported goods inflation is expected to push up underlying inflation ahead.”

Consumer prices have risen 5.1% over the past year, according to Statistics Norway.

Oil-rich Norway is not part of the European Union, though it has a close economic relationship with the bloc.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Image: A cargo ship is stuck under the part of the structure of the Francis Scott Key Bridge after ...

Associated Press

Authorities identify 2 bodies recovered at site of Baltimore bridge collapse

A major bridge in Baltimore snapped and collapsed after a container ship rammed into it early Tuesday, and several vehicles fell into the river below.

2 days ago

Photo: Mountaineer Jim Whittaker has died at 95....

Gene Johnson, The Associated Press

Lou Whittaker, among the most famous American mountaineers, has died at age 95

Lou Whittaker, a legendary American mountaineer who helped lead ascents of Mount Everest, K2 and Denali, has died at age 95.

2 days ago

File photo: Former Sen. Joe Lieberman speaks in Washington on Jan. 18, 2024....

Associated Press

Former Sen. Joe Lieberman, Democrats’ VP pick in 2000, dead at 82

Former U.S. Sen. Joe Lieberman of Connecticut, who nearly won the vice presidency on the Democratic ticket with Al Gore in 2000, has died.

2 days ago

islamic state attack...

Vanessa Gera, The Associated Press

What we know after the Islamic State group claims responsibility for Moscow massacre

The Islamic State group has claimed responsibility for an attack on a suburban Moscow concert hall that killed at least 133 people.

5 days ago

Moscow shooting...

The Associated Press

Russia: 60 dead, 145 injured in concert hall raid; Islamic State group claims responsibility

Assailants burst into a concert hall in Moscow on Friday and sprayed the crowd with gunfire, killing over 60 people, injuring more than 100.

7 days ago

Photo: Britain's Kate, Duchess of Cambridge visits 282 (East Ham) Squadron, RAF Air Cadets, Cornwel...

Associated Press

Kate Middleton announces she has cancer, is undergoing chemotherapy

Kate Middleton, Princess of Wales, says she is undergoing chemotherapy to treat cancer. She has been out of view since Christmas.

7 days ago

Norway’s central bank raises key policy interest rate