Norway's Central Bank, As Expected, Keeps Rates Unchanged; But ING Surprised With Its Commitment To Rate Increases

09:18 AM EDT, 03/26/2026 (MT Newswires) -- Norges Bank on Thursday, as expected, kept its policy rate unchanged at 4.0%, but it did surprise the market by saying "it will likely be appropriate to raise the policy rate at one of the forthcoming monetary policy meetings."

ING noted after the policy statement that it had expected a hawkish shift in Thursday's policy meeting at Norway's central bank, but it said the kind of commitment to rate increases that emerged in the statement came as a surprise. A near 10bps jump in one-year krone (NOK) swap rates, on top of the +43bps move since the start of the Middle East war, signals markets were equally surprised by the hawkish messaging, it added.

Updated rate projections now fully embed a 25bps rate hike in Q3, and a roughly 50% probability of a further 25bps increase in Q4. That is a significant shift in direction from December's Monetary Policy Report, which signaled one rate cut in 2026, said ING.

Inflation projections have been revised one percentage point higher to 3.4% for this year, and core CPI 0.6ppt higher to 3.3%. Growth for 2026 is still expected at 1.2% though, with downward revisions for 2027 (-0.2 ppt) and 2028 (-0.6ppt).

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