Norway raises key interest rate to fight inflation and expects further hikes ahead

Norway’s central bank says it has raised its key interest rate by half a percentage point in an effort to “bring inflation down to target.” Norges Bank said Thursday that higher wage growth and a weaker-than-projected krone will boost inflation and “international interest rates have risen more than anticipated.” The Scandinavian country, which is not part of the European Union, had an inflation rate in May of 6.7%. That’s far above the central bank’s target of 2%. However, the bank noted that “pressures in the Norwegian economy are easing.” It added that following Thursday’s hike to 3.75%, the policy rate will most likely be raised further in August.