Iceland hikes by 25bp, citing rising expectations
Economic outlook deteriorates as energy prices rise and domestic wage pressures persist
The Central Bank of Iceland has raised rates by 25 basis points to 7.75%.
In its statement released today (May 20), the central bank’s monetary policy committee said its members had reached the decision unanimously, and cited inflation running at more than 5% in 2026 thus far. The bank targets annual inflation at 2.5%.
The bank also cited rising inflation expectations, particularly over the short term. However, it noted that expectations had risen less since the start of the Iran war than they had
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