Norway raises rates to 5.5%

The Bank of Norway raised rates for the first time this year on Thursday on fears that inflation was set to breach its 2.5% target.

The key policy rate now stands at a five-year high of 5.5%.

"Capacity utilisation is high and the labour market remains tight. The first wage settlements indicate, as expected, that wage growth is picking up," said Jan Qvigstad, the deputy governor of the central bank. "House prices have risen again after declining for several months. Oil prices remain high. The

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