Norway has raised its overnight deposit rate to 1.5%, beginning what will likely be a rate-tightening cycle for most of Europe.
Country’s economy has been particularly robust during this downturn, and responded well to government stimulus.
Thus the country’s attention has turned towards preventing undue inflation, earlier than many of its peers may be able. Yet they’ll follow.
Bloomberg: Fiscal stimulus has helped keep Norway’s jobless rate the lowest in Europe, with registered unemployment falling to 2.7 per cent in September. Survey unemployment was 3.2 per cent in the August quarter, Statistics Norway said today.
Households were quick to benefit from monetary easing earlier this year, with about 90 per cent of mortgage holders using floating rates, according to the Finance Ministry. That’s boosted demand, with retail sales rising in the last three months for which data are available.
Cheap loans and low unemployment have helped push the housing market up in the last three quarters, with prices now matching their peak from the summer of 2007, the Finance Ministry estimates.