December 7, 2022

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Norwegian politics, the Nett på . case

Norwegian politics, the Nett på . case

Internet is at the heart of the matter These are the comments written by Nettavisen Editor-in-Chief.

Prime Minister Jonas Gahr Store should be glad that NATO President Jens Stoltenberg remains in office, to avoid speculation about the political impact on the Norges Bank and interest rates.

When Central Bank Governor Ida Walden Bach presents the bank’s interest rate decision tomorrow, the focus will be solely on economic reasons. Nobody thinks Walden Bash is listening to political cues.

For regular loan customers, the interest rate screw began to tighten after Norges raised the rate by 2.25 percentage points in one year. If the bank settles at 0.25 percentage points tomorrow, the bank’s customers will get roughly 2.5 percentage points higher in one year.

For a family with a mortgage of NOK five million, this means NOK 125,000 in higher housing interest in one year, or just over NOK 10,000 per month. After taxes, housing costs are in excess of about NOK 100,000, and it hardly affects the vast majority.

Too late to be safe when the house is on fire

Most Norwegians are notoriously bad at insuring themselves against bad times, and unfortunately it’s too late to get fire insurance when the house is on fire. That’s why I and many other people with slight financial stress have advised pegging interest rates when they are at their lowest, even if they are more expensive than letting the interest rate float.

The reason the Bank of Norway should be a bit cautious now is that Norway’s private economy has already been treated for higher electricity costs, higher taxes, more expensive fuel and a series of interest rate increases. There are clear signs that the drug is working, and significant negative consequences of overusing it. We do not need an unnecessary collapse of bankruptcy and a sharp increase in unemployment at the top.

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Are we approaching the peak of the interest rate?

For now, the public sector continues to spend money like never before, while the task of cooling the economy is left entirely to ordinary people and businesses.

The big question is whether we are approaching the peak of the interest rate, or whether it is necessary to take more steps upwards with the interest rate. Economists are delusional. A majority believe 0.25 percentage point this week, while a fairly large minority expect 0.5 percentage point.

In any case, most people think we’re approaching a peak interest rate of plus/minus 3.0 percent of the policy rate – and thus just under 5.0 percent of the interest on regular mortgages.

My advice is that Norges raises the rate by 0.25 percentage points this time, and waits for the next 0.25 percentage points until the next interest rate meeting in December.

This is in line with what Norges said in September: “Over the past year, the key interest rate has been raised from zero to 2.25 percent. Monetary policy is now beginning to have a tightening effect on the Norwegian economy. This may indicate more gradual progress in interest rate setting in the future. In the forecast, from It is assumed that the policy rate will rise to about 3 percent during the winter.”