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MNI BRIEF: Norges Bank Hikes 25bps; Next Move Likely June

(MNI) London

The Norges Bank delivered its widely anticipated 25 basis point hike Thursday, adding that the next move would most likely be a further hike in June, warning that the policy rate path may be higher than it previously anticipated if krone weakness persists.

The Monetary Policy and Fiinancial Stability Committee's latest hike lifted the policy rate to 3.25% from 3.0%. In its previous forecast round, the committee showed the policy rate reaching 3.5% by the summer and peaking a touch above that.. The committee warned, however, that the policy rate may have to rise further still. (MNI NORGES WATCH: Well-Flagged 25Bp Hike Seen, More On The Way)

Its economic assessment said growth had come in about as expected but that the labor market was still tight, with registered unemployment at just 1.8% and earnings growth set to rise with a back 5.2% wage rise agreed. The krone has weakened more than Norges Bank expected and the Bank's commentary makes clear that the end of the rate hiking cycle may not be imminent, with the door clearly open to a peak of at least 3.75% with the full forecast round due in June.

MNI London Bureau | +44 203-586-2223 |
MNI London Bureau | +44 203-586-2223 |

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