Nordic Central Banks Bow to Risk in Policy Back Track

Central banks in Sweden and Norway are bowing to pressure to delay interest-rate increases next year as the prospect of a global recovery dwindles and borrowing costs in the U.S. and Europe remain low.

The Stockholm-based Riksbank on Oct. 26 said faltering recoveries abroad will prevent it from raising interest rates next year as fast as it signaled in September. Oslo-based Norges Bank yesterday said it won’t raise its rate from 2 percent until the middle of 2011, compared with a June forecast for tightening to resume at the “turn of the year.”