Norway central bank hikes key policy interest rate to 1.25%

COPENHAGEN, Denmark (AP) — Norway’s central bank has raised its key policy interest rate from 0.75%  to 1.25%. In a statement on Thursday, Norges Bank cited a bigger than expected decline in unemployment and higher than anticipated inflation as factors in its decision. Inflation in Norway is at 5.7%, while unemployment came in at 3.2% in May. The bank said wage growth and higher prices for imported goods mean inflation is likely to stay elevated for some time. The bank’s governor said the interest rate would most likely increase further, to 1.5 % in August.