Norway Hikes Rates, Sweden Signals Possible Tightening

Norway raised its key interest rate by a quarter point to 4.5%, saying borrowing costs may need to stay high and further increases remain possible as energy costs and other price pressures threaten progress toward its 2% inflation target. Sweden held its rate at 1.75%, but signaled it could begin raising rates before year-end if the economic and inflation outlook holds; a Bloomberg survey found economists now expect a hike to 2% in the fourth quarter. Switzerland kept its rate at zero, while the broader concern for policymakers is that fuel-price increases driven by Middle East tensions could spread into wages and other prices.