By Victoria Klesty and Gwladys Fouche
OSLO (Reuters) -Norway’s central bank raised its benchmark interest rate by 25 basis points (bps) to 2.50% on Thursday, as expected by nearly half the economists surveyed by Reuters, and said it would likely hike again in December to help curb inflation.
“We are raising the policy rate to curb inflation,” Governor Ida Wolden Bache said in a statement.
Of the 25 analysts polled in advance, 12 had anticipated a hike of 25 bps, in line with Norges Bank’s own prediction from September, while another 12 had bet on a 50 bps increase and one predicted a 75 bps rise.
“Based on the committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised further in December,” the bank said in a statement.
“The outlook is more uncertain than normal. The future policy rate path will depend on how the economy evolves.”
The Norwegian currency, the crown, fell to 10.32 against the euro at 0903 GMT from 10.28 just before the rate announcement.
The U.S. Federal Reserve on Wednesday raised rates by 75 basis points and said its battle against inflation would require borrowing costs to rise further, yet signalled its tightening campaign may be nearing an inflection point.
Norway’s core inflation in September rose to a rate of 5.3% year-on-year, ahead of analysts’ 4.9% average forecast, led by a 12.1% rise in the cost of food and beverages.
The central bank targets core inflation of 2.0% over time.
(Reporting by Victoria Klesty and Gwladys Fouche, editing by Terje Solsvik)
