– Increasing interest rates now I see as completely out of the question – E24

September, December or next year? Economists disagree about when the first interest rate cut will take place. Handelsbanken's economist believes that the door is also open to raise interest rates.

The vast majority of economists expect the Bank of Norway to leave interest rates unchanged at 4.5 percent on Thursday.

There is greater tension over what the central bank will say about interest rates in the future.

At the interest rate meeting, Norges Bank will present new forecasts, also for the key interest rate.

Sees a reduction in the deferred interest rate

Chief Economist Marius Gunsholt Hof at Handelsbanken expects the Bank of Norway to raise its interest rate path, i.e. giving an indication whether it will take longer before the first interest rate cut comes.

Hof believes Norges Bank will now point to the first quarter of next year as the most important, but with a rate cut likely to take longer.

Chief Economist Kirsti Haugland expects interest rates to be cut as early as December this year.

Economists point to a more expensive wage settlement than Norges Bank expected, expectations of higher interest rates internationally and corporate signals about increased activity are among the factors that point to a postponement of interest rate cuts.

In the past, September and December have been highlighted as possible dates for the first rate cut.

– Raising interest rates is now completely out of the question

As one of the few economists, Hof noted there was also a risk that Norges Bank would raise interest rates on Thursday.

– Today's interest rate path has little probability of a rate hike. He says this possibility has now increased.

Hoagland disagrees.

– I think that raising the interest rate now on Thursday is absolutely out of the question. Why didn't Norges Bank notify him already in May? When they got wage growth, when they got fairly good GDP numbers, and at least when the krone exchange rate was very weak.

– If Norges Bank had raised interest rates now, there would have been a complete break with the business pattern expected from Norges Bank. If there's anything we've learned in the past year, it's that they do what they say, she says.

– I think the Bank of Norway has opened the door to that. Hof responds: They say that if it is necessary to reduce inflation, they are willing to raise the interest rate.

The question is whether Norges Bank is more patient to reduce price inflation now, says Hof, in a situation where the Regional Network survey shows things are going “surprisingly well” in the Norwegian economy.

-We agreed to adhere to the strategy. So we refer to this as a risk. It's bigger than you might want to think.

-The crown is very important

If the krone had been much weaker, there would likely have been a sudden rise in interest rates, says Olaf Chen at Storebrand.

The krona has weakened a lot, which makes it more difficult to bring down inflation. But since the previous interest rate hike by the Norwegian Bank in December, the krone has appreciated somewhat.

Chen's prediction is that Norges Bank will wait until December to cut interest rates. He believes that Krone will be a clown in the future.

– Along with wage growth and the regional network – if the value of the krone falls again to low levels, the possibility of raising interest rates is back on the table.

Chen points out that a weak krone exchange rate makes imported goods more expensive and could increase profitability and wage growth at export companies that benefit from the weak kruna. This could mean higher price growth.

-He says the crown is very important.

– There will be interest rate cuts in Europe and the USA

– The big picture is that this was a wave of inflation that will subside, says chief economist Jan L Andreasen at Ekagruppen.

-It's on its way to the United States and Europe. There will be interest rate cuts in Europe and the United States. “Then the crown is a joker,” he says.

His forecast is to cut interest rates in September.

Andreessen says his “guess” is that the krone will rise, among other things due to interest rate cuts by the European Central Bank.

– I think there is a transformation underway – in other words, that the Norwegian economy is about to take some hit, says Hoogland.

She points to new signals of increased corporate activity in the Regional Network Survey, to which Norges Bank attaches great importance.

– It does not depend strictly on lowering the interest rate. People get higher salaries in their accounts. We had significant nominal wage growth last year and this year.

– She says the price rise is certainly much lower than it was.

There is one sector that will face real difficulties now, which is the construction sector, says Andreessen.

– He says it is too early to talk about any cover there.

Rising interest rates and increasing material costs have hit the construction industry hard, but some bright spots have been reported recently.