OSLO, May 11 (Reuters) – Norway’s annual core inflation rose in line with expectations in April, Statistics Norway (SSB) data showed on Monday, supporting expectations interest rates could increase further this year.
Core inflation, which strips out changing energy prices and taxes, stood at 3.2% year-on-year, up from 3.0% in March and in line with the average forecast by analysts in a Reuters poll.
The central bank had also expected core inflation to rise to 3.2%, well above its goal of 2.0%.
Norway’s currency, the crown, traded largely unchanged against the euro at 10.81 following the 0600 GMT data release.
Norges Bank on Thursday raised its policy interest rate by 25 basis points to 4.25%, moving sooner than analysts had expected, to quell resurgent inflation driven by increasing wages and high energy prices.
The bank’s decision stands in contrast with those of other major central banks, which have argued that more time and data were needed to gauge the impact of the war in Iran on the longer horizon that is relevant for policymakers.
Central bank Governor Ida Wolden Bache said on Friday the bank would continue to combat inflation but that it did not foresee a pronounced increase in the policy rate.
The central bank will make its next policy interest rate announcement on June 18. Analysts on average do not expect another hike then but instead foresee one later in the year.
(Reporting by Terje Solsvik in Oslo and Louise Rasmussen in Copenhagen, editing by Anna Ringstrom)
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