|Published : 10 Mar 2017, 15:43:50 | Updated : 10 Mar 2017, 15:44:31|
Norway inflation fall to four-year lows in Feb
Norwegian consumer prices fell to four-year lows in February, Statistics Norway said, putting pressure on the central bank to maintain an easing bias on interest rates and plunging the crown currency to a four-month low against the euro, reports Reuters.
Core inflation, which excludes effects of tax changes and energy prices, tumbled to 1.6 per cent year-on-year from 2.1 per cent in January, while analysts in a Reuters poll had on average expected core inflation of 2.0 per cent.
The forecast miss was even greater for the central bank, which in December predicted that February inflation would stand at 2.6 per cent, just above its medium-term target of 2.5 per cent.
While recent economic data have pointed to stronger-than-expected growth, the lower inflation introduces a difficult trade-off for the central bank when its board announces its next interest rate decision on March 16.
As a result, Norges Bank will probably maintain its easing bias and refrain from lifting its forward rate guidance, Nordea Markets economist Erik Bruce said.
"We had anticipated an upwards revision to the rate path next week, but we're doubting that now. I believe they'll keep the path where it is," he told Reuters.
Norway's crown currency weakened to around 9.1235 shortly after the 0700 GMT data release from 9.0881 earlier, the weakest level seen since November of last year.