MNI Norges Bank Preview - May '26: Patience May Not Prevail

FOR THE FULL PUBLICATION PLEASE CLICK HERE 

EXECUTIVE SUMMARY:  

• Norges Bank laid the foundations for rate hikes at the March decision, and we expect the first to be delivered in May, bringing the deposit rate to 4.25%. Such a move would go against analyst consensus for a hold at 4.00%, though rates markets lean slightly in favour of a hike.
• Norges Bank are primarily concerned about high domestic inflation, with the Iran war providing a separate hawkish impulse to the outlook given Norway’s status as an energy exporter. As such, we don’t see much value in the Board waiting till June to hike rates – elevated inflation has been flagged as a concern for some time now, and the March guidance was quite clear that the Committee is ready and willing to act
• Of the 14 analyst previews we have seen, 6 expect a rate hike in May and 8 expect a hold. Notably, of the 6 Scandinavian bank previews we have seen, 4 expect a hike and 2 expect a hold.