Core inflation in Norway for December is lower than expected by Reuters

OSLO (Reuters) – Norway’s core inflation rate fell more than expected in December, data from Statistics Norway (SSB) showed on Friday, supporting expectations that interest rates will start to fall this year.

Core inflation, which does not include energy prices and variable taxes, was 2.7 percent year-on-year, down from 3.0 percent in November and below the 2.8 percent expected by analysts in a Reuters poll.

The Norwegian Central Bank expected core inflation to reach 2.8%.

The Bank of Norway in December kept interest rates unchanged at a 16-year high of 4.50% and said it intended to cut interest rates three times in 2025, down from four cuts it had previously seen, with the first easing expected in March.

The central bank, which targets core inflation at 2.0%, said at the time that it expected the interest rate to fall to 3.75% by the end of 2025, in a blow to hopes of global monetary easing.

Norges Bank is scheduled to make its next interest rate announcement on January 23.

SSB data showed that food and non-alcoholic beverage prices rose 4.0% year-on-year, making a significant contribution to inflation.

Headline inflation, which includes changes in energy costs and taxes, fell in December to 2.2% from 2.4% in November, while analysts in a Reuters poll had expected a reading of 2.5%.