OSLO (Reuters) – Norges Bank is expected to raise its benchmark interest rate again this week, a Reuters poll showed on Monday, and signaled that borrowing costs will continue to rise in the fourth quarter to fight inflation.
Among 28 economists surveyed, 28 predicted Norges Bank will Rate hike
Sept Basis point(bps) to 2.28 %, the highest level since 2011.
One forecaster said a 28 bps increase to 2.0% was the most likely outcome, while another forecast would 75 bps rose to 2.50%.
After the pandemic and the war in Ukraine, global central banks are struggling to control inflation , leading to a sharp rise in interest rates.
Norway’s consumer prices rose 6.5% in August from a year earlier, even as the government partially capped soaring electricity bills. Meanwhile, core inflation excluding energy was 4.7%, beating the central bank’s 2.0% target.
Most participants in a Reuters poll now say rates are likely to hit 2.75%, well above the 2. the central bank’s June forecast %.
Norges Bank last raised rates by 50 basis points in August and said it may raise rates again in September, but not The magnitude of the rate hike was not specified.
Handelsbanken Capital Markets predicts another rate hike 50 by the MPC this week, but says the market is likely to price in 75 point.
“Further, we believe Norges Bank will give sufficient indication that the policy rate will be raised to 2.28%, although it is very likely to rise to 3.0%,” Handelsbanken said.
The central bank released a BU sinesses survey last week showing a weaker outlook for companies.
Norges Bank may start cutting policy rates in 2024, a Reuters poll predicts.