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Retain Optionality Depending On Data

NORWAY

Norges Bank state that growth has slowed but the labour market is still tight. They retain some optionality for future decisions but with a continued hawkish bias.

  • "Labour costs are expected to increase more than projected earlier", which will put additional pressure on inflation.
  • They maintain language that policy is "now having a tightening effect of the economy".
  • Optionality is retained to base future decisions on economic developments if warranted, noting they do "not want to raise the policy rate more than is necessary to tackle the high level of inflation".

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