Nordic & Swiss Economics

Nordic & Swiss Economics Update

16 May, 2018

Central Bank of Iceland on hold for now

While the Central Bank of Iceland left policy unchanged today, its new forecasts show that it expects inflation to remain above target for the next three years. Moreover, we think that the Bank is underestimating the scope for inflation expectations and wages to rise. So while the consensus expects interest rates to be unchanged for the next two years, we forecast three 25bp increases from December.

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