Norges Bank could raise interest rates as early as August if upcoming inflation data comes in above market expectations, according to macroeconomic analysis cited by E24.
The warning underscores the central bank's cautious stance as it monitors persistent price pressures that have defied earlier hopes for a steady decline toward the 2% target.
The prospect of a rate hike in August represents a significant shift in market sentiment, which had largely priced in a pause or potential easing cycle.
A higher-than-expected inflation print would force policymakers to prioritize price stability over growth support, potentially triggering a repricing of Norwegian government bonds and equities.
Investors are now closely watching for any signals that the central bank is prepared to act decisively to anchor inflation expectations.
This development comes amid a broader backdrop of sticky inflation across major economies.