Norway's central bank yesterday cut its headline interest rate for the second time this year to a record low of 0.75 per cent and signalled rates could go even lower.
The Norges Bank said it saw “weakened growth prospects for Norwegian economy” and weaker prospects for inflation.
The bank added that “the policy rate may be cut further in the coming year”.
“The bank is increasingly worried about the impact that low oil prices will have on the economy, having trimmed their growth forecasts for mainland GDP for 2016 and 2017,” said economist Colin Bermingham from BNP Paribas. The relatively high inflation rate is expected ease further out in the horizon, meaning there are no concerns of a persistent inflation overshoot.”