Norges Bank likely to stay pat, no change expected in rate path

Norges Bank is set to publish its rate decision on Thursday, 27 October and it is widely expected to keep rates on hold at 0.5 percent. No change to the rate path is expected, and the press release will probably indicate that Norges Bank has not changed view significantly.

Norges Bank revised down its view on the domestic economy strongly through 2015 very much in line with the drop in oil prices and stronger NOK and higher oil prices should be fairly neutral to its view.

No major surprises seen in Norway's real economy since September. NOK is 2 ½ percent stronger than forecasted and will have an impact on the view on both inflation and growth. Inflation in September was 0.4 percent points below forecast.

"Norges Bank will probably downplay one month with inflation on the downside and the development in both rates abroad and money market spreads is too small to have any big influence," said Nordea Markets in a report.