Tight policy keeping a lid on inflation – Central Bank of Iceland

Central Bank of Iceland
The Central Bank of Iceland

Monetary policy in Iceland is having to work hard against "steep" pay increases and rising house prices, the Central Bank of Iceland's latest report to parliament says.

Published on January 24, 2017, the report says inflation will likely remain in the 2.5–3.0% range across the forecast horizon, which extends to mid-2019. But while the central bank expects wage increases and domestic demand to "lose pace" in the coming period, "the situation could easily change".

"In its interest rate decisions

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