The Bank of Norway once again raised its key rate on Thursday, this time by 0.25 points to bring it to 2.5%, its highest level since early 2009, in order to curb runaway inflation.
After this fourth consecutive increase, less than the three previous ones which were each 0.5 point, the Norwegian central bank considers that a new monetary tightening is highly probable at the end of its next meeting to review rates in December.
If an increase was widely expected by economists, the big unknown was the magnitude of the increase.
Economic activity is high in Norway, and unemployment at historically low levels, bank governor Ida Wolden Bache said in a statement.
Inflation has continued to accelerate and is well above the 2% target. We are raising the rate to curb inflation, she added.
Indicator used by the Bank of Norway to decide on the level of its rates, so-called underlying inflation, i.e. excluding energy and tax variations, rose to 5.3% over one year in September in the Scandinavian country, unheard of since its creation in 2001.
Global inflation, all products combined, reached its highest level since June 1988, 6.9%.
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Having become the main supplier of natural gas to Europe in place of Russia in the wake of the invasion of Ukraine, the Scandinavian country is experiencing vigorous growth, driven in particular by hydrocarbons.
After having long kept its key rate at zero to cushion the economic effects of the Covid pandemic, the Norwegian central bank was one of the first in the Western world to raise its rates, with a first hike in September 2021.
Its counterparts in the industrialized world, from the American Fed to the European Central Bank (ECB) via the British, Swedish and Swiss central banks, have since followed suit.