Norway wage rate likely to grow at 2.8pct in 2016

The Norges Bank hold the bank rate unchanged at 0.75% yesterday, was in line with market's expectation. However, few experts argued that the Bank may cut rate as fall in oil prices hit the economy, and monetary majors are required to boost the economy. 

"The central bank revised up its core inflation projections by 0.2pp for 2016 and 2017, whereas, lower its wage growth projection by 0.1pp for 2016 to 2.8% and 0.1pp for 2017 to 3.1%", notes Nordea Bank.

The Norges Bank argues the increase in inflation is temporary, and it will come down soon once the NOK depreciation is controlled.