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(Bloomberg) — Norway’s underlying inflation eased to its lowest level in more than two years, offering policymakers reassurance that could advance the case for an interest-rate cut.
The pace of core consumer-price growth, which excludes volatile items such as energy, declined to 3.3% in July, the least since April 2022, according to data from the statistics office on Friday.
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That outcome was lower than the median forecast of economists surveyed by Bloomberg, which anticipated inflation to stay at 3.4%. It’s also noticeably less than the 3.7% level projected by Norges Bank.
Weakening price pressures could help persuade officials to consider cutting borrowing costs sooner than currently envisaged. In June, they delayed the projected start of easing until 2025 on worries that the energy-rich Nordic economy hasn’t cooled as much as expected.
Inflation remains consistently faster than in the neighboring euro zone, and Norway is one of the only countries in the wider region not to have begun lowering rates. Adding to the case for caution is a recent weakening of the krone, which risks fueling imported price growth.
The headline inflation rate rose to 2.8%, in line with economists’ estimates. The acceleration was the first since November, because electricity prices fell by less than they did a year earlier.
Average wage increased last quarter at the slowest clip in a year, while the annual pace of 5.4% still exceeded the central bank’s projection for the full year, the statistics office said on Thursday.
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