AP

Norway’s central bank enacts big rate hike to tame inflation

Aug 17, 2022, 2:43 PM | Updated: Aug 18, 2022, 2:50 am

COPENHAGEN, Denmark (AP) — Norway’s central bank raised its key policy interest rate by half a percentage point Thursday, saying “inflation has been considerably higher than projected.”

The rate’s increase to 1.75% was larger than expected as the bank takes aim at inflation that reached 6.8% in July. It noted that unemployment is very low, falling more than expected last month to 3.2%, and “activity in the Norwegian economy is high.”

“The rise in prices has been broad-based in recent months and may entail that inflation will remain high for longer than expected earlier,” Norges Bank said in a statement. “A faster rate rise now will reduce the risk of inflation becoming entrenched at a high level and the need for a sharper tightening of monetary policy further out.”

It comes as central banks around the world are making big rate increases to tackle decades-high inflation. The U.S. Federal Reserve, Bank of England and European Central Bank have all carried out hikes of a half-point or larger in recent weeks as they look to cool down the economy without tipping it into recession.

The central bank in Norway, which is not a member of the European Union, noted that “persistent global price pressures will lead to a further acceleration in price inflation.”

“On the other hand, the rise in interest rates and high inflation may cool down the housing market and curb household consumption faster than currently envisaged,” the bank said. “There is also a risk of a sharper slowdown in global growth.”

Based on the outlook and balance of risks, the bank said it will likely raise the policy rate further in September.

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 This material may not be published, broadcast, rewritten or redistributed.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.

16 hours 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.

17 hours 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.

17 hours 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.

4 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.

6 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.

6 days ago

Norway’s central bank enacts big rate hike to tame inflation