the Executive board of Norges Bank has decided not to change the key rate in this place. It notify the central bank on Thursday. Thus remains the key policy rate at 0.5 per cent, which is a historic low.
the News is released a half hour before the governor Øystein Olsen, director of the monetary policy Ida Wolden Bache and the executive director for financial stability, Torbjørn Hægeland set to press conference 10:30. See the press conference directly in the window above!
In contrast to earlier statements that we could see a rate cuts in the year, there is now new tones from the central bank:
– So we are now considering the prospect, the key policy rate should most likely remain at the current level in the near future, ” says governor Øystein Olsen.
the Majority of the E24s renteråd recommended in advance of this week’s meeting the governor to let the interest rate be unchanged in this place, and it was also the vast majority of the analysts expected would happen in advance of the rentemøtet.
Rentenyheten also comes just over a week after the Norges Bank published the latest version of bedriftsundersøkelsen Regional Network. Where it came out that the situation in the Norwegian economy looks somewhat brighter, although it is still heavily in the oil service business. Experts E24 spoke with interpreted the report as yet another sign that the downturn in the Norwegian economy in the aftermath of the oljebremsen has reached the bottom, although there is talk about an economic bonanza ahead.
In its grounds shows Norges Bank’s Executive board to the following developments since the previous board in June to explain the decision their:
- Inflation in the last few months have been unexpectedly high
- Signs of slightly stronger economic growth and higher capacity utilization
- House prices have increased more than expected, and low interest rates may help to ensure that this keeps up
The Norwegian crown strengthened markedly in the minutes after rentenyheten was known. Get the latest on the market in the E24s Aksjelive.
also Read: chief economist of Swedbank: – Confirms that we are out of oljenedturen
SSB: the Unemployment rate rose to 5 percent in July
does not Close the door completely for the cut
When the governor Øystein Olsen cut interest rates the last time, under the rentemøtet in march, he was clear that it could probably get a rate cuts to the:
So we are considering the prospects, the key policy rate should be set further down in the course of the year, said the governor.
During the rentemøtet in June allowed the Norges Bank key policy rate should lie in the 0.5 per cent. Although they still indicated that we would probably see a rate cuts in the year, raised the rentebanen something, that implicitly means that they saw a reduced chance for a cut. In 2015 the cut, Norges Bank interest rate twice in 2014, once.
Here, economists at Nordea Markets change, Norges Bank has made in rentebanen since June. The bright line shows the old rentebanen, which indicated that we would probably get a rate cuts in the year. The new rentebanen suggests that we are unlikely to get it.
– There are still prospects that the key policy rate can be put down in the course of the year, said central bank governor in June.
Now shows Norges Bank that their analysis in the October monetary policy report imply a key policy rate that remains close to 0.5 per cent for the next couple of years.”
– at the same time involves renteprognosen that there is some larger probability that the key policy rate is down than up next year, writes the central Bank.
Norges Bank’s new rentebane has a 20 percent probability for rate cuts in December, and a further 20 per cent in march.
– the central Bank thus has more likely than not interest rates remain unchanged, but does not rule out the possibility of new cuts, ” says chief analyst Erik Bruce at Nordea Markets to E24.
The central bank of the united STATES keeps the interest rate unchanged
He says that it is in line with expectations.
– It looks like a renteprognose as in all is very similar to what we had expected. It is higher inflation and stronger pressure on the Norwegian economy that pulls up, as expected, ” says Bruce in Nordea.
Norway’s real estate agents think Norges Bank should freeze the current interest rates for a longer period of time. They believe that the new movements in interest rates can amplify the imbalances in the housing market.
- It may seem like many experts have underestimated styringsrentens effect on house prices in the Oslo market. NEF has long warned against the effect on house prices in pressområder when the key policy rate should run down at low levels, ” says Geving, and adds:
the Combination of knapphetsfaktor and low borrowing costs has contributed to the strong rise in prices in Oslo. Therefore, it would not be lucky if the interest rate is lowered to an even lower level.
Read more here.
chief economist Shakeb Syed in SpareBank 1 Markets interpret current news from the central bank as that rentebunnen is reached:
– Verbally speaking, the central bank is far on the way that this is rentebunnen. That Norges Bank still puts in 40 per cent likelihood of rate cuts in rentebanen we look at as a sensible risk management – so that the door does not close completely, but kept ajar so that the credibility not to deteriorate if the central bank may need to reverse, writes Syed in a report.
– Unexpectedly high
In a press release on Thursday explains, Norges Bank decision to leave interest rates lie with several factors.
Among other things, writes the Norges Bank that the pace of boligprisveksten has increased and that inflation has been higher than they thought. In addition, they that the inflation rate has been high. The prices in Norway have increased markedly in a period of time now, and this has largely been driven by the fact that the crown has weakened in line with oil prices since 2014, which makes imported goods more expensive.
Inflation here at home has been unexpectedly high in recent months. There are also signs that growth in the Norwegian economy picks up a little faster than projected in June (…) Low interest rates can contribute to the growth in house prices holding up and increase the vulnerability of the financial system. On the other side is the growth in the Norwegian economy is moderate, and the capacity utilisation is below a normal level, writes the central bank.
One point, however, that a low kostnadsvekst and a somewhat stronger krona than before do that inflation “is likely to subside after each”.
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