Norges Bank came on Thursday last week with a 0.25 percentage point rate hikeso that the benchmark interest rate in Norway is now 2.25%.
At the same time, the central bank has announced that there will most likely be another hike in the next meeting, which is also the last of the year, in December.
– There is high activity in the Norwegian economy and unemployment is at a historically low level. Price inflation has increased further and is clearly above our two percent target. We raise the interest rate to curb price inflation, Central Bank Governor Ida Wolden Bache said.
In the wake of Thursday’s interest rate hike, banks are now following suit, with DNB being the first to announce an interest rate hike. The bank raises the interest rate on mortgages and deposits by up to 0.25 percentage points, according to a message on Monday.
– Against the backdrop of Norges Bank’s decision to raise the benchmark interest rate by 0.25 percentage points at the November 3 interest rate meeting, DNB decided to raise the interest rate on mortgages and deposits up to 0.25 percentage points, says Ingjerd Blekeli Spiten, DNB’s head of personal markets in an announcement on the stock exchange.
New interest rates apply from 8 November for new customers and from 19 December for existing customers.
Several raise interest rates
Shortly after DNB announced an interest rate hike for its clients, KLP Banken writes that it is also raising interest rates by 0.25 percentage points.
In KLP, the interest rate change applies to new customers from November 7th, while for existing customers the change applies from December 21st.
– Higher key interest rates from Norges Bank and expectations of further increases contribute to higher borrowing costs for us. That’s why we are raising interest on mortgages and bank deposits, says Jorunn Ygre Storjohann, director of retail at KLP Banken.
Jorunn Ygre Storjohann in KLP Banken. (Photo: Skjalg Böhmer Vold / KLP)
It usually doesn’t take long for banks to raise their interest rates after Norges Bank changes the key interest rate. In both August and September, most major banks raised interest rates by 0.5 percentage points just days after the interest rate decision.
Central Bank Governor Bache said at the press conference that Norges Bank assumes banks will set interest rates on mortgages slightly below Norges Bank’s interest rate increases in the future. He justifies this with the fact that banks have set interest rates on deposits lower than Norges Bank.
Sparebanken Sør announces just before 1:30 pm that it will also raise the interest rate by 0.25 percentage points. Sparebank 1 SR-Bank also increases the interest rate on mortgages and deposits by up to 0.25 percentage points.
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