Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- Bank's decision complicated significantly by Norway's worst COVID-19 wave of the pandemic
- Nonetheless, economic progress should counter near-term omicron concerns
- Bank could stop short of name-checking March for further hikes
When name-checking December as the most likely meeting at which rates would next rise, Norway was enjoying an economy growing faster than expected, bubbling wage and price pressures and a low level of COVID-19 infection rates relative to their neighbours. The board now must judge whether the resurgence in the infection rate and unknown lethality of the omicron variant counter strong underlying economic trends.
Figure 1: Norway in middle of worst COVID-19 wave of pandemic so far
Source: MNI/Our World In Data
Despite the uncertainty, economic developments posted since September’s policy report have been sufficiently ahead of expectations to allow the bank to progress with their plan to hike rates by 25bps, but will likely retain the optionality of a pause in the tightening cycle next year should the omicron variant threaten inflation and economic dynamics.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.