Norges Bank raised interest rates. Investors point to those responsible
Norwegian investors criticize the current level of interest rates. After the latest decision by Norges Bank, they are pointing at politicians. In their opinion, it is the decisions of the parliamentary majority that have affected the cost of money.
Investors claim that politicians have too much influence on Norges Bank.
Fot. Fotolia
In May, Norges Bank raised the key policy rate to 4.25 percent. Economists predict that another hike may follow. The debate over the causes of high interest rates has entered the public sphere. Investors and a government representative have weighed in.
Norwegian investors blame politicians for high interest rates
Carl Erik Krefting, a real estate investor, told Dagens Næringsliv that higher rates in Norway are the result of political decisions. According to him, it is a consequence of actions taken by the majority in the Storting. Krefting also rejects the explanation that inflation was mainly imported. In his view, politicians are avoiding responsibility.
Investor Jan Petter Sissener is also critical. He points to public spending in Norway and highlights the subsidy system. According to him, these factors are significant drivers of inflation.
Investor Jan Petter Sissener is also critical. He points to public spending in Norway and highlights the subsidy system. According to him, these factors are significant drivers of inflation.
Some argue that Norges Bank should have reacted earlier, which would have avoided the need to raise interest rates in May.Photo: Adobe Stock, standard license
4.25 percent rate in Norway. Government responds to investors' accusations
The government presents a different assessment of the situation. According to its position, Norges Bank's decision to raise the rate path is due to reasons other than public spending. This argument was presented in Dagens Næringsliv by Ellen Reitan from the Labour Party. Reitan is State Secretary at the Ministry of Finance.
The finance ministry representative claims that the government is pursuing a responsible policy. She also referred to the revised national budget. According to her, the document has a neutral impact on the Norwegian economy. This means the government does not consider it a factor increasing pressure on the economy.
The finance ministry representative claims that the government is pursuing a responsible policy. She also referred to the revised national budget. According to her, the document has a neutral impact on the Norwegian economy. This means the government does not consider it a factor increasing pressure on the economy.
The debate is taking place as the market awaits further decisions from Norges Bank. The current rate is 4.25 percent. The possibility of another hike means that the question of the sources of inflationary pressure remains crucial for investors, borrowers, and the state administration.
How do you rate this article?