MNI BRIEF: Norges Bank Pause; Dec Hike Likely But 'May' Hold

The Norges Bank left the policy rate on hold at 4.25% Thursday and while repeating that a December hike was likely it added that if the evidence grew that underlying inflation was falling, it could leave policy on hold.

The Monetary Policy and Financial Stability Committee's decision -- with a full forecast round only due next month -- opens up a possibility of the policy rate peaking at 4.25%, with the guidance given a dovish twist from September's highlighting of a likely December hike.

“Based on the Committee’s current assessment of the outlook, the policy rate will likely be raised in December ... If the Committee becomes more assured that underlying inflation is on the decline, the policy rate may be kept on hold”, Governor Ida Wolden Bache stated,

The committee restated its high-for-long guidance. The brief economic analysis accompanying the decision stated that economic pressures had eased with growth low, mainland, or non-oil, GDP a touch lower in August than expected with private services activity in particular notably softer. Inflation had come in below expectations and the bank noted signs of easing in the labour market, with vacancies declining.