Interest rate peak nears as inflation in Norway continues to slow
Price growth in Norway has continued to slow. However, food prices are still driving inflation in Norway, and the country's consumer price index was measured at 4.8 percent in August. Norway's CPI fell by 0.8 percent from July to August and is 4.8 percent higher compared to a year ago, the latest figures from the national data agency Statistics Norway show.
Inflation was lower than Norges Bank had forecast, the bank expected inflation to be around 6.1 percent.
"It is good news for people in Norway that price growth is on the way down," Minister of Finance Trygve Slagsvold Vedum told Norwegian newswire NTB.
"The main job in economic policy is to bring down inflation and keep people in work. When we get price inflation under control, it will be for the best for everyone, not least those who are now experiencing a tougher economic everyday life," he added.
The twelve-month growth is 0.6 percentage points lower than in July. Lower energy prices are responsible for the yearly inflation figure falling for the second month in a row.
"Last year, we measured high price growth for electricity from July to August. This year, the situation is the opposite. Electricity prices fell in most parts of the country from July to August. This is an important reason why the twelve-month growth in the CPI is going down," Espen Kristiansen from Statistics Norway said.
Food prices also fell between July to August. Despite the 0.8 percent fall between the two months, the cost of food is still one of the biggest drivers of inflation in Norway. In August, food prices were 9.3 percent higher than they were a year before.
"We saw an unusually steady and strong increase in food prices from March to June this year, a period of the year when prices tend to fall somewhat. A price drop from July to August, on the other hand, is more in line with what we usually see this month," Kristiansen said.
The steady inflation figures can be seen as a sign that the central bank's next interest rate will probably be the peak.
"Today's inflation figures make us confident that next week's interest rate hike by Norges Bank will probably be the last," the bank Nordea said in a comment.
A rate hike next will take the key policy rate in Norway to 4.25 percent and will be the 13th since 2021.
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Norway's CPI fell by 0.8 percent from July to August and is 4.8 percent higher compared to a year ago, the latest figures from the national data agency Statistics Norway show.
Inflation was lower than Norges Bank had forecast, the bank expected inflation to be around 6.1 percent.
"It is good news for people in Norway that price growth is on the way down," Minister of Finance Trygve Slagsvold Vedum told Norwegian newswire NTB.
"The main job in economic policy is to bring down inflation and keep people in work. When we get price inflation under control, it will be for the best for everyone, not least those who are now experiencing a tougher economic everyday life," he added.
The twelve-month growth is 0.6 percentage points lower than in July. Lower energy prices are responsible for the yearly inflation figure falling for the second month in a row.
"Last year, we measured high price growth for electricity from July to August. This year, the situation is the opposite. Electricity prices fell in most parts of the country from July to August. This is an important reason why the twelve-month growth in the CPI is going down," Espen Kristiansen from Statistics Norway said.
Food prices also fell between July to August. Despite the 0.8 percent fall between the two months, the cost of food is still one of the biggest drivers of inflation in Norway. In August, food prices were 9.3 percent higher than they were a year before.
"We saw an unusually steady and strong increase in food prices from March to June this year, a period of the year when prices tend to fall somewhat. A price drop from July to August, on the other hand, is more in line with what we usually see this month," Kristiansen said.
The steady inflation figures can be seen as a sign that the central bank's next interest rate will probably be the peak.
"Today's inflation figures make us confident that next week's interest rate hike by Norges Bank will probably be the last," the bank Nordea said in a comment.
A rate hike next will take the key policy rate in Norway to 4.25 percent and will be the 13th since 2021.
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