Krone crisis

They have become consumers More cautious. They are following the development of interest rates, delaying large purchases and turning their backs on the krone. The krone reached a record low value last week. For most people, it was a positive that the Norges Bank chose to keep its key interest rate unchanged, but there is a clear reason why experts disagree on what will happen at the next interest rate meeting: uncertainty surrounding exchange rate developments.

Norges Bank itself believes we should see another increase in interest rates before they fall next year. Others think that’s enough for now. The bank does not control the exchange rate, but it closely monitors what happens to the krone, because weakness affects inflation to a large extent. The euro is sniffing the NOK12 mark, the US dollar has crossed the NOK11 mark, and the British pound is now hovering around NOK14.

Dependence on the outside Goods and services inevitably mean that the prices of imported goods will continue to rise. This could reflect the positive development in inflation we have seen so far this fall. In such a climate, raising interest rates could become a weapon to keep inflation low.

It may seem that holidays abroad are one of the last things Norwegians give up, as these have also become significantly more expensive in the past year. Going on a shopping trip to major European cities might be fun, but there’s not much that can be saved on that anymore. However, there is no doubt that the population’s awareness of so-called macroeconomic conditions has increased due to the turmoil in the economy. One thing is that consumption has become weak, but it has also changed in character. We pay close attention to the conditions offered by banks. When very high profits are reported due to high interest rates, the relationship with customers is challenged and many consider changing banks.

This also applies Those who have now started saving money in the bank again. There are big differences between financial institutions when it comes to interest on deposits.

The increasing trend towards reuse and trade in used goods also contributes to the pressure on trade in quality, price and contribution to the sale of used items. Electricity prices contribute to reducing consumption and finding new climate solutions, while here also putting pressure on both suppliers and authorities.

Consumer pressure and consumer behavior So this will mean a lot in the future, but it is currency fluctuations, along with oil prices, that will mean a lot for household prosperity.