May 06, 2021
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Norway: NB reaffirms H2 hike intention

  • The Norges Bank kept the policy rate unchanged at zero percent and reiterated their view that its policy rate would probably rise in the latter half of 2021.
  • We think it is too early to call an end to the pandemic and are less sanguine on the global outlook. The risks skew to a later hike, albeit with the Norges Bank a first mover.

April 09, 2021
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Norway: CPI surprise, surprise

  • Inflation surprised on the downside this month, mostly due to household energy bills, but with clothing and airfares also disappointing.
  • The recent shift in Norges Bank signalling towards a potential tightening in 2021 looks exposed to us, as we are more cautious on the pace of exit from pandemic restrictions.

March 18, 2021
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Norges Bank: The end of ZIRP

  • The Norges Bank MPC unsurprisingly kept the policy rate at zero, however, the real news is the introduction of tightening pressure within its 2021 policy rate projections. Such hawkish revisions were flagged by our model as a reflection of reduced spare capacity.
  • There are three reasons for the Norges Bank’s hawkish stance: an improvement in global economic prospects; the vaccination rollout in Norway is proceeding faster than expected; ZIRP with an overheating housing market is an inappropriate combination.