Norwegian inflation was slightly lower than expected in August, as the overall rate fell to 2.6%. As expected, the core rate fell to 3.2%. Although inflation is moving towards Norges Bank's target of 2%, the core rate remains stubbornly high, Commerzbank’s FX Analyst Antje Praefcke notes.
Weak NOK is Norges Bank's biggest concern
“That the core rate appears to have fallen somewhat faster in the last two months than Norges Bank expected in June. This could be an argument for Norges Bank at its interest rate meeting next week to consider lowering the policy interest rate earlier rather than in 2025 (as signaled in June).”
“If Norges Bank's regional network survey, which will be published today as the last piece of information before the interest rate decision, shows that the economic outlook risks deteriorating in the next couple of months, the risk that Norges Bank could bring forward first interest rate cuts increases further.”
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