Stay up to date with the latest news: Get the Nettavisen app iPhone And Android here!
Have you noticed how much more expensive everything has become? In recent years, price growth has become widespread in Norway, where inflation, that is, the growth of the general level of prices in society, has reached seven percent.
This creates a huge headache for our central bank, Norges Bank, which has done everything it can to reduce price inflation.
The Norwegian Bank’s main mission is to ensure that inflation in Norway reaches around 2%, and it has raised interest rates sharply to precisely this end.
Modest effect
In the past two years, Norges Bank’s key interest rate has risen from zero to 4.25 per cent in an uphill battle to keep price inflation under control, sending mortgage interest rates in Norway soaring.
But the impact on price growth was modest. As of last September, the core inflation rate was 5.7 percent, nearly double the target set by the Norwegian Central Bank.
But Friday will see numbers that could give a very clear indication as to whether inflation is finally starting to get under control.
On Friday at 8am we will find out the price rise for October from Statistics Norway (SSB).
These are the numbers that Norges Bank naturally attaches great importance to before the last interest rate meeting of the year on December 14, and it can decide whether it is necessary to raise the interest rate again.
Decimal can decide
Relatively small changes here can have major consequences on whether or not your mortgage becomes more expensive.
DNB Markets believes that if monthly growth exceeds 0.2 percent, then it is Norges Bank sets the interest rate. However, monthly growth of 0.1 or less means they believe inflation is on the way down, and hence there is no need to raise the interest rate further.
Central Bank Governor Ida Welden Bash confirms that the numbers will be important.
Read also: A new interest rate hike is announced in December
-The numbers we received for September were slightly below our expectations. We will take Friday’s numbers and all other new information with us until our next interest rate meeting, central bank governor Ida Wolden-Basch tells Netafsen here:
-Very decisive
The krone continues to weaken, falling this week to 12 Norwegian kroner to 1 euro.
This is because the market is becoming increasingly certain of this no There will be another rate hike in December. At the same time, the weak krone contributes to further price growth, as all goods that must be purchased abroad become more expensive.
The market went from a 50 percent chance of raising interest rates to 30 percent last week. The inflation figures coming on Friday will be quite decisive, Nordea Bank currency analyst Dane Sikov told Netafsen on Tuesday.
September: The third month of falling prices
The price increase has decreased over the past 12 months from 4.8 percent in August to 3.3 percent in September. This is the third consecutive month of declining twelve-month growth.
The only problem is that much of this decline is due to things Norges Bank doesn’t expect, such as lower electricity prices, and core inflation, which is core inflation, is much higher, at 5.7 percent.
But it is also on a downward curve, and has fallen for four full months in a row, from a peak of seven percent in June of this year.
Gunnar Stavrum: What Norges Bank dares to say
Read also: Low price inflation: – Good news for Norges Bank
“Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff.”