Key takeaways

• Norges Bank raises interest rates by 25 bp.
• The key interest rate is up to 4.25%.
• The move represents the first hike from a major European central bank.
• EUR/NOK is down by approx. 0.5%

Contrary to most economists’ expectations, Norges Bank decided to raise interest rates by 25 bp, bringing the benchmark rate up to 4.25%. Norges Bank is thus the first major European central bank to decide on such move. Earlier, the ECB, BoE, and Riksbank had opted to hold rates steady. In response to the move, the Norwegian krone strengthened by approx. 0.5% against the benchmark euro, recouping a significant share of yesterday’s losses, which were largely the result of declining energy commodity prices.

Figure: EUR/NOK (2025-2026)

Source: xStation,

07/05/2026 The hike is primarily intended to anchor inflation expectations, especially in light of fairly persistent core inflation, which remained at 3% in March, and still elevated wage growth, which exceeds 4% YoY in many sectors. Officials’ statements lacked clear indications regarding future moves. The meeting was not accompanied by a new interest rate projection. The March one suggested a single rate hike before the end of the year—under current conditions, however, it seems likely that the bank will continue to tighten its monetary policy in the coming months. A rate hike at the June (18/06) meeting is almost fully priced in by the markets. Yet another hike in September is considered a base case scenario.

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