Norges Bank cuts rates to 4%

(Sharecast News) - Norges Bank cut its policy rate on Thursday by 25 basis points to 4% as it signalled a more gradual easing path going forward. Governor Ida Wolden Bache said: "The job of bringing inflation back to target has not been completed, but a cautious easing of monetary policy will pave the way for returning inflation to target without restraining the economy more than needed.

"Incoming data since June indicate that there is a little less spare capacity in the economy, and that inflation may remain elevated for a little longer than projected in June. Therefore, we will probably not reduce the policy rate ahead as quickly as envisaged before summer."

Wolden Bache said the Bank does not envisage a large reduction in the policy rate ahead.

"The forecast presented today is consistent with one rate cut per year in the coming three years. In the projections, the average interest rate on residential mortgage loans declines to a little more than 4.5% in 2028," she said.