Norges Bank faces pivotal decision on interest rate at today's meeting

At 10 a.m. today, Norges Bank's governing board will reveal its stance on adjusting the policy rate, a move that could mark the second hike since May. Governor Ida Wolden Bache faces a difficult choice between the danger of insufficient tightening and the possibility of overdoing it. In addition to the rate decision, the board will publish a revised outlook for future rate movements, which could affect borrowers with large debts.

Inflation continues to run higher than the bank's goal, and wage growth is outpacing price increases, though some recent data suggest a slowdown. Domestic economic conditions appear subdued, with modest growth, high unemployment, stagnant housing prices, and a weak construction sector. Internationally, recent rate hikes by the Fed and ECB add pressure for a Norwegian move.