MNI BRIEF: Norges Bank Cuts But Raises Rate Path

Norges Bank cut its policy rate by 25 basis points to 4.0% but raised its rate path and tilted away from a further rate cut this year, it said on Thursday.

The rate path showed the policy rate at 3.9% next year, 0.3 percentage point higher than in the previous quarterly forecast in June, and only declining to 3.3% by the end of the three-year forecast, 0.2 pp above the June prediction.

"If the economy evolves broadly as currently projected, the policy rate will be reduced further in the course of the coming year," the Bank's Monetary Policy and Financial Stability Committee stated in its guidance.

It said a higher policy rate was likely to be needed compared to June and restated its commitment to a "cautious normalisation" of policy while noting that inflation, which has stayed above target, has evolved as expected. (See MNI NORGES WATCH: Cut Could Come Now, Or Later This Year)