Iceland’s Inflation Climbs, Paving Way for More Rate Hikes

Iceland’s inflation rate rose to the highest level in a year and a half, driven by the cost of oil and putting pressure on the island’s central bank to tighten its monetary stance even further.

The consumer price index increased 5.4% from a year earlier, largely in line with forecasts from the country’s largest lenders. Landsbankinn hf predicted inflation at 5.4% and Islandsbanki hf had penciled in 5.5%. The reading is the highest since September 2024.