Economics
Currency Springs Central Bank Trap as Iceland Risks Overheating
- Rates may be cut as Iceland falls victim of its own success
- Sedlabanki holds final rate meeting of the year on Wednesday
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Economics text books would probably recommend against cutting interest rates in a country that’s growing at a supercharged pace of almost 5 percent, where wages are soaring at more than double that rate and unemployment is virtually non-existent.
Yet that’s precisely what the central bank of Iceland may need to do when it holds its final rate setting meeting of the year on Wednesday.