Key Takeaways
- After two rate cuts in June and September, markets are not expecting Norwegian interest rates to change now until 2026.
- Summer 2026 is seen as the next likely time for an interest rate cut, although analysts say a lot depends on whether inflation falls.
- Norway’s unemployment is rising and the currency is weakening.
Norway’s final monetary policy meeting of the year on Dec. 18 is expected to see Norges Bank keep interest rates unchanged at 4%. High inflation is cited by the country’s central bank as a reason for a cautious approach to lowering interest rates, which have been cut twice already in 2025.
Analysts at Nordea say a December rate cut is “out of the question”.
“At 3%, underlying inflation is still too high and Norges Bank is not in a hurry as governor Ida Wolden Bache has highlighted several times,” say Kjetil Olsen, chief economist, and Sara Midtgaard, senior macro and FX strategist.
Karine Alsvik Nelson, senior economist at Handelsbanken, says that while the Consumer Price Index After Taxes and Energy came in marginally below Norges Bank’s forecast for November, it was not enough to materially change the inflation picture.
What Are the Key Norges Bank Interest Rates?
- Policy rate: 4%
- Overnight lending rate: 5%
- Reserve rate: 3%
Norway’s Economy is Losing Momentum
While inflation remains too high, there are signs that the Norwegian economy is weakening.
“The overall impression of the Norwegian economy is that it is slightly softer than anticipated. Growth in Q3 was on the low side, employment growth has been on the low side and the regional network report also came out on the soft side,” say Nordea’s Olsen and Midtgaard.
They note lower capacity utilization and easier access to qualified labor as signs of a softer economy.
SEB chief strategist Erika Dalstø says that capacity constraints and labor shortages are slightly below their historical averages.
As firms report weaker hiring intentions, unemployment has risen to 2.2%, earlier than Norges Bank expected. Although not at high level, the rise could signal weaker conditions ahead.
“The increase reflects only small changes in jobseekers, and the labor market remains broadly balanced. Still, the signals now point toward a gradual rise in unemployment ahead,” says Karine Alsvik Nelson, senior economist at Handelsbanken Capital Markets.
Weak Currency Limits How Much the Rate Path Can Fall
While forecasters and analysts agree that interest rates are on a downward trajectory, the weakening of the Norwegian kroner or NOK has added another dimension for the central bank to consider.
“Without the weakening of NOK, we would have seen a clear downward adjustment of the rate path and a March cut could not at all been ruled out. One obvious downside risk to the rate path is therefore the NOK exchange rate which should get support from increased NOK buying from Norges Bank starting up in January,” say Nordea’s Olsen and Midtgaard.
Handelsbanken’sAlsvik Nelson says that broader risk sentiment continues to weigh on the currency and that “despite surprisingly good Norwegian growth in the first half the year, the NOK has continued to disappoint in the currency market.”
Will Norges Bank Cut Rates in 2026?
Here are the key interest rate decision dates:
- March 26, 2026.
- May 7, 2026.
- June 18, 2026.
- Aug. 13, 2026.
- Sept. 24, 2026.
Nordea sees June as the most likely moment for the next cut, while flagging that downside inflation surprises could make a cut in March “highly probable”.
Handelsbanken expects the next rate cut to most likely be delivered in June, earlier than Norges Bank’s previous projection of a cut in autumn 2026. “We expect another cut by the end of next year—somewhat earlier than we had previously anticipated,” says Alsvik Nelson.
SEB’s Dalstø says that monetary easing is approaching, though it is not imminent: “The regional network report confirms that more policy easing will be needed though it is not weak enough to call for immediate action.”
