Norway central bank raises key rate to fight inflation

COPENHAGEN, Denmark (AP) — Norges Bank raised its key policy rate by 25 percentage points on Thursday to 2.25 percent, as other banks around the world also moved to lower inflation.

Norges Bank said that inflation, which hit 6.5 percent in August, “has risen rapidly over the past few months and is well above expectations.”

“Inflation is significantly above our 2 percent target, and inflation is likely to remain elevated for longer than previously expected,” central bank governor Ida Wolden Bache said in a statement.

The central bank added, “There are clear signs of economic cooling now. Easing economic pressures will help further curb inflation.”

Norges Bank noted that “accelerating rate hikes now will reduce the risk of inflation remaining at high levels and the need for further monetary tightening.”

It said the policy rate was likely to rise further in November.

Central banks around the world are raising interest rates sharply to combat inflation, which has soared as the global economy rebounded from the COVID-19 pandemic and then Russia’s war in Ukraine.

On Wednesday, the Fed The third consecutive rate hike by three-quarters.In a busy day for the central bank, Swiss monetary policymakers hiked key interest rates by the largest ever Bank of England under pressure to act aggressively on Thursdayalso.

Earlier this month, the European Central Bank also raised interest rates Three quarters. Norway is not part of the EU.