Norway central bank raises rate to 4.25%, eyes surprise December hike

The policy rate was forecast to stay around 4.5% through 2024, the central bank added. The crown strengthened to 11.47 against the euro at 0805 GMT, from 11.52 just before the announcement.

Norway's central bank raised its benchmark interest rate by 25 basis points (bps) to 4.25% on Thursday to curb inflation, as widely predicted, and, in a surprise move, said it would likely hike again in December. All 30 economists polled in advance by Reuters expected a 25-basis-point hike on Thursday, and a majority of participants had predicted that this would mark the peak of Norges Bank's two-year campaign of tightening.

"There will likely be one additional policy rate hike, most probably in December," Governor Ida Wolden Bache said in a statement. The policy rate was forecast to stay around 4.5% through 2024, the central bank added.

The crown strengthened to 11.47 against the euro at 0805 GMT, from 11.52 just before the announcement. Norway's annual

core inflation , which excludes energy costs, stood at 6.3% in August, down from a June peak of 7.0%, and has remained above the bank's 2% target since February 2022.