Norway's Central Bank Holds But Keeps Door Open to Hike

By Fabiana Negrin Ochoa

Norway's central bank kept interest rates unchanged again as easing underlying inflation and continued uncertainty around the Middle East conflict supported waiting for more evidence before tightening policy further.

Norges Bank kept its key policy rate at 4.25% on Thursday, in line with economists' expectations in a Wall Street Journal poll.

The decision comes as central banks around the world closely watch shifting U.S.-Iran tensions and efforts to reopen the Strait of Hormuz. The key oil-shipping route has been blocked by the fighting, driving up energy prices and threatening a broader inflationary shock.

Though inflation has slowed and been lower than projected during the summer, it is still too high, and too early to conclude that the outlook has changed materially, said Gov. Ida Wolden Bache.

"It may thus still become necessary to raise the policy rate," she said.

ING economists said in a recent note that any improvement in inflation could be fleeting as the base effects that have weighed on inflation could begin to reverse as early as August. Wage growth also remains elevated.

Most economists see scope for another rate hike this year, as signalled by Norges Bank itself.

Analysts at TD Securities think the Norges Bank committee will likely want additional evidence on underlying price pressures and activity before taking action, which they expect to come in the autumn unless disinflation progresses more quickly than anticipated.

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

August 13, 2026 04:23 ET (08:23 GMT)