Norwegian Interest Rate Cut Possible Amid Stable Inflation

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Norwegian Interest Rate Cut Possible Amid Stable Inflation
Photo: Ole Berg-Rusten NTB/TT

The underlying inflation in Norway, where energy prices have been cleaned up, was 3.1 percent in August – the same level as in June and July. It is in line with the prognosis of the central bank Norges Bank.

Norway's Bank has flagged that it may be relevant to lower the interest rate next month, if the development goes as expected.

The underlying inflation was however simultaneously unexpectedly high in August, according to analysts. The average forecast was 2.9 percent.

And the so-called CPI inflation rose to 3.5 percent, up from 3.3 percent in July. The increase was however in line with expectations.

Norway's Bank has ahead of the interest rate decision next week an interest rate of 4.25 percent, the highest interest rate in more than 16 years.

From Denmark – whose currency has a fixed exchange rate against the euro – comes at the same time figures showing that inflation fell to 1.9 percent in August, down from 2.2 percent in July, according to EU-harmonized figures from the country's statistical office.

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By TTEnglish edition by Sweden Herald, adapted for our readers

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