Norway’s booming economy will trigger faster rate rise, statistics office says

People go about their day near Norway’s central bank building in Oslo, Norway May 31, 2017. REUTERS/Ints Kalnins

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OSLO, June 10 (Reuters) – The Norwegian economy is growing faster than expected this year and inflation is accelerating, which will likely trigger a more rapid increase of interest rates by the central bank, Statistics Norway (SSB) said on Friday.

“We are heading into an economic boom. Meanwhile, we have record-high inflation, which suggests that the key policy rate will be raised relatively quickly,” SSB researcher Thomas von Brasch said in a statement.

The agency predicted that Norges Bank will hike rates by 50 basis points later this month – the largest hike in over a decade and double the central bank’s own official forecast of a 25 basis points increase.

Norway’s core inflation rose to 3.4% year-on-year in May from 2.6% in April, SSB separately reported on Friday, while analysts on average had expected a reading of 3.1%.

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Reporting by Terje Solsvik, editing by Gwladys Fouche

Our Standards: The Thomson Reuters Trust Principles.

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