Norwegian underlying inflation slowed in February as the krone’s strength pushed down the cost of imported consumer goods.
Annual underlying inflation, which adjusts for taxes, fees and energy prices, slowed to 1.1 percent from 1.2 percent in January, Oslo-based Statistics Norway said today. Prices were estimated to rise 1.1 percent, according to the median forecast in a Bloomberg survey of 11 economists. Underlying consumer prices rose 0.7 percent in the month.
Policy makers in Norway, western Europe’s largest oil producer, have signaled they will raise rates as soon as this week to cap household credit growth and surging house prices. The central bank has kept rates unchanged since March last year in part to keep an appreciation in the krone in check.
The currency reached a record on a trade weighted basis on Feb. 13, closing at 84.30. It’s up from 3 percent from a low last year. A strong krone has helped keep inflation below the central bank’s 2.5 percent target since mid-2009.
Headline inflation was 1 percent in the year and consumer prices rose 0.7 percent in the month.
Policy makers will announce their next rate decision on March 14.