A Breakthrough Week in Norway. What's Next for Prices?
The Norwegian market faces a week full of inflation data and central bank decisions. These may influence expectations regarding mortgage interest rates. At the center are readings from Norway and the USA, as well as the decision of the European Central Bank (ECB).
The Norwegian krone remains stronger than in the same period in 2025.
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The coming days will be important for assessing the condition of the Norwegian economy. Chief economist Marius Gonsholt Hov from Handelsbanken told E24 that it will be an "exciting macro week." Statistics Norway (SSB) will release May inflation data on Wednesday, and the ECB will announce its interest rate decision a day later. The market will also see the "Regionalt nettverk" report from Norges Bank.
Prices remain high, loans on hold
SSB will publish the May inflation reading on Wednesday. Handelsbanken assumes that core inflation rose to 3.3 percent, which is the level expected by Norges Bank. This is an important indicator. Norges Bank looks at core inflation because it excludes energy prices and tax changes.
In April, price growth fell to 3.4 percent. Core inflation then stood at 3.2 percent, and the result was lower than forecasts. However, Hov points out that price pressure remains elevated because wages have risen sharply in Norway. According to him, inflation now has domestic sources and is not only due to war and high energy prices.
In April, price growth fell to 3.4 percent. Core inflation then stood at 3.2 percent, and the result was lower than forecasts. However, Hov points out that price pressure remains elevated because wages have risen sharply in Norway. According to him, inflation now has domestic sources and is not only due to war and high energy prices.
Some experts believe that internal factors are more important than geopolitical issues.Photo: Adobe Stock, standard license
Norwegian banks weigh decisions. The market watches the data
In March, Norges Bank changed its communication tone. Instead of announcing rate cuts, there was a signal of hikes this year. The first hike came in May. The interest rate then rose to 4.25 percent, and the bank announced another move at one of the upcoming meetings.
Economists disagree on the timing. Hov believes that core inflation at 3.3 percent would be neutral for the decision and would not necessarily mean a hike already in June. Senior economist Oddmund Berg from DNB Carnegie expects core inflation to fall to 3.0 percent. Such a result could argue for postponing the decision, although DNB Carnegie still assumes a rate hike in June.
The ECB is expected to raise the rate to 2.25 percent on Thursday. This move is widely anticipated and, according to the market, has already been priced in. Hov points out that the central bank in Europe wants to limit the effects of price increases driven by energy. Berg adds that core inflation in the eurozone is 2.5 percent, and ECB decisions may also be significant for Norges Bank.
Economists disagree on the timing. Hov believes that core inflation at 3.3 percent would be neutral for the decision and would not necessarily mean a hike already in June. Senior economist Oddmund Berg from DNB Carnegie expects core inflation to fall to 3.0 percent. Such a result could argue for postponing the decision, although DNB Carnegie still assumes a rate hike in June.
The ECB is expected to raise the rate to 2.25 percent on Thursday. This move is widely anticipated and, according to the market, has already been priced in. Hov points out that the central bank in Europe wants to limit the effects of price increases driven by energy. Berg adds that core inflation in the eurozone is 2.5 percent, and ECB decisions may also be significant for Norges Bank.
Norges Bank with an important report. What will the Norwegian data say?
On Thursday, Norges Bank will present the "Regionalt nettverk" report. The document is based on interviews with 400 companies and organizations. Hov expects weaker production forecasts, from 0.3–0.4 percent to 0.1–0.2 percent. In May, 1.9 percent of the Norwegian workforce was completely unemployed.
On Tuesday, SSB will also release the producer price index for May. The indicator covers, among other things, oil and gas extraction, industry, energy, and selected services. Hov believes that producer prices show where prices in the economy may be heading. In the US, the market awaits Wednesday's inflation data, and at the end of the week, attention will turn to Donald Trump's 80th birthday and planned events at the White House.
On Tuesday, SSB will also release the producer price index for May. The indicator covers, among other things, oil and gas extraction, industry, energy, and selected services. Hov believes that producer prices show where prices in the economy may be heading. In the US, the market awaits Wednesday's inflation data, and at the end of the week, attention will turn to Donald Trump's 80th birthday and planned events at the White House.
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