Relief for Borrowers on the Horizon? Norges Bank May Cut Interest Rates Up to Four Times
The Norwegian economy is entering a period of significant uncertainty regarding interest rate levels. Eight economists interviewed by E24 present various scenarios for Norges Bank's decisions in 2026. Some experts believe that rate cuts won't happen until 2027, while others predict as many as four cuts.
Economists have different forecasts regarding Norges Bank's decisions in 2026.
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Economists' forecasts are driven by persistently high inflation. Inflation remains close to 3 percent and rose to 3.4 percent in October. There is also strong wage pressure, which makes it difficult for prices to fall quickly.
According to Marius Gonsholt Hov from Handelsbanken, the pace of reducing inflation has slowed. In his view, the only cut in 2026 may not come until September.
According to Marius Gonsholt Hov from Handelsbanken, the pace of reducing inflation has slowed. In his view, the only cut in 2026 may not come until September.
More Optimistic Scenarios from Economists
Some experts, however, expect more rate cuts. Erica Dalstø from SEB anticipates two moves—in June and December. She believes inflation may fall faster than Norges Bank expects.
Kjersti Haugland from DNB Carnegie assumes that one cut could happen in June. She emphasizes that the Norwegian economy may accelerate as early as 2025, with unemployment remaining at a low level.
Kjersti Haugland from DNB Carnegie assumes that one cut could happen in June. She emphasizes that the Norwegian economy may accelerate as early as 2025, with unemployment remaining at a low level.
Some experts predict as many as four cuts in 2026.Photo: Norges Bank press materials
Forecasts of Four Cuts and Scenarios with No Changes
The most far-reaching forecasts come from Frank Jullum of Danske Bank and Jan Ludvig Andreassen from the Eika financial group. They expect up to four cuts in 2026, pointing to rising unemployment, weakening job growth, and low credit dynamics.
Jullum highlights the potential weakening of investments in the oil sector, which could increase pressure for policy easing. On the other hand, representatives of Nordea Markets and Sparebank 1 Markets do not foresee any rate changes next year.
Jullum highlights the potential weakening of investments in the oil sector, which could increase pressure for policy easing. On the other hand, representatives of Nordea Markets and Sparebank 1 Markets do not foresee any rate changes next year.
Norges Bank Remains Cautious
Norges Bank is maintaining a cautious approach to further actions. In September, the reference rate was lowered to 4 percent, and in November it remained unchanged.
The bank assesses that the economic outlook has not changed significantly. The interest rate forecast points to one cut per year over the next three years. The potential timing for a move is summer or early autumn 2026.
The bank assesses that the economic outlook has not changed significantly. The interest rate forecast points to one cut per year over the next three years. The potential timing for a move is summer or early autumn 2026.
What Will Decide Interest Rates in 2026
In the coming months, key data will include inflation, wages, and the labor market. These will determine the possible scale and pace of Norges Bank's future decisions. Changes in investments, especially in the oil sector, may also play a role.
Economists will monitor upcoming readings to more precisely determine the direction of monetary policy. As a result, 2026 may prove to be a year of particularly volatile expectations.
Economists will monitor upcoming readings to more precisely determine the direction of monetary policy. As a result, 2026 may prove to be a year of particularly volatile expectations.
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