Norges Bank hikes rates by 25 basis points to 4.5%

(Sharecast News) - Norway's central bank lifted interest rates on Thursday for the second time this year and said it would be prepared to hike again to contain inflation. Norges Bank raised its key deposit rate by 25 basis points to 4.5%. Economists had been split in their forecasts, with some expecting the central bank to stand pat.

Governor Ida Wolden Bache said: "Inflation has been above target for several years. By raising the policy rate, we are helping to reduce inflation. It will likely be necessary to keep the policy rate elevated for a time, and the Committee is prepared to raise the policy rate further if needed to bring inflation down to the 2% target within a reasonable time horizon.

"At its monetary policy meeting in June, the Committee judged that it would likely be necessary to raise the policy rate at one of the forthcoming meetings. Over the summer, underlying inflation moderated and was lower than expected. But the inflation outlook somewhat further ahead does not appear to have changed materially."

Also on Thursday, the Swiss National Bank left rates on hold at 0%, as expected, while Sweden's Riksbank opted to leave its key policy rate unchanged at 1.75%, also as expected, although it warned of possible rises to come.