Five interest rate hikes on the horizon have made a huge dent in the wallets of most of us with mortgages. Over the past six months, several renowned economists have questioned whether the Governor of the Central Bank needs to be as eager to raise interest rates as she has been.
Were the critics right?
Central bank chief Ida Wolden Bache appeared in “Erlig talt” to answer whether, in the light of hindsight, she could have been a little more restrained.
On Thursday this week, the governor of the central bank chose to keep the interest rate unchanged.
– Does that mean your critics were right?
– Our assessments of the Norwegian economy are thorough and our task is to ensure stable inflation. When we have raised the interest rate, it is to bring down inflation. The interest rate decisions we have taken are in line with that objective, replies Wolden Bache.
STABLE INFLATION: – Our assessments of the Norwegian economy are thorough and our task is to ensure stable inflation, says central bank governor Ida Wolden Bache. Photo: Erik Edland / TV 2
The interest rate peak has not been reached
She goes on to say that even if the interest rate is kept calm this January, it will continue to rise and the next interest rate increase will probably come as early as March.
– But when the chief economist at LO airs the idea that you are taking things too hard, what do you think?
– It is a sign of health that there is a debate about monetary policy. It is not unnatural to have different assessments.
– Do you think he is wrong?
– We have different assessments of the prospects and the risk picture than he does
Uncertain economic outlook
– What about professors who are out there and say that the consequences are too great if you are wrong and ask you to calm down the interest rate hikes? Does it make an impression?
– We are confident in our assessments, replies Wolden Bache
– But do you understand that we who are ordinary wage earners get uneasy when the opinions among renowned economists diverge like that? When more people think that you don’t need to be so strict with us? Are you taking it too hard?
– I understand that more households are getting tighter finances and that it is demanding, and then the financial outlook is uncertain. They always will be.
SAFE: – We are confident in the assessments we make and most Norwegian households have the finances to handle the increased expenses, says Ida Wolden Bache. Photo: Erik Edland / TV 2
You can withstand the interest rate increases
– But when you use a medicine that hits the wallets of ordinary people so hard. Then we would like to be one hundred percent sure that the medicine you are using is correct and perhaps even more importantly that it is dosed correctly?
– We are confident in the assessments we make and most Norwegian households have the finances to handle the increased expenses, says Wolden Bache.
– But are you sure that the medicine is correct and, even more importantly, that it is dosed correctly?
– I am confident in our assessments and should the economy change, we will adjust the interest rate.
