Norway central bank lifts rates by 25 basis points

Norway's central bank lifted its benchmark interest rate on Thursday by 25 basis points to 2.75%, as expected.

This marks the highest level since February 2009. Norges Bank noted that consumer prices have risen rapidly, and inflation is markedly above target.

"Based on the Committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised further in the first quarter of next year," it said.

Governor Ida Wolden Bache said forecasts for the Norwegian economy are "more uncertain than normal" but that if the economy evolves as expected, the policy rate will be around 3% next year.

Earlier in the day, the Swiss National Bank upped its key policy rate by 50 basis points to 1.00%, in line with expectations.

This marked the third rate hike this year. The SNB said it was aiming to tackle "increased inflationary pressure and a further spread of inflation". Inflation in Switzerland stood at 3% in November, which is well below the 10.7% rate of inflation in the UK and 10% in the eurozone.

On Wednesday, the US Federal Reserve hiked rates by 50 basis points, as expected. Although this marked a slowdown in hikes, with the Fed having lifted rates by 75 basis points at each of its last four policy meetings, the central bank struck a hawkish note and adjusted up its expectations for rate rises next year.

The Bank of England and the European Central Bank are expected to raise rates by 50 basis points when they make their latest policy announcements later on Thursday.