(Adds currency, analyst, detail)
By Terje Solsvik
OSLO, Feb 10 (Reuters) - Norway's core inflation rate
jumped in January to its highest level on record, Statistics
Norway data showed on Friday, increasing the probability that
interest rates will continue to rise and boosting the country's
currency.
Core inflation, which strips out changing energy prices and
taxes, rose 6.4% year on year, exceeding the central bank's 5.9%
expectation for January as well as the 6.1% average prediction
among analysts polled by Reuters.
"This is the highest level Statistics Norway has seen since
calculations began in 2001 ... we still see a broad and strong
increase in prices of most goods and services when comparing
with January of last year," the agency said in a statement.
Norway's crown currency strengthened to 10.89 against the
euro by 0749 GMT from 10.94 ahead of the data release.
Global inflation soared last year as the cost of
commodities such as energy and food rose sharply, and in most
countries the growth in consumer prices remains well above
levels targeted by monetary policy makers.
Norges Bank, which aims for core inflation of 2.0%, has
hiked its key policy rate eight times since late 2021, raising
it to 2.75% from zero, and has said another increase to 3% is
likely to come at its next policy meeting in March.
The central bank has not revealed, however, whether it
intends to raise rates even further, and analysts are closely
watching data such as inflation, growth, unemployment and
housing prices for clues.
Friday's inflation data was "well above expectations" and
the broad-based nature of inflation points to rates also rising
after the March central bank meeting, Handelsbanken analysts
wrote in a note to clients.
"The market had already begun to factor in a greater
probability for the key policy rate to reach 3.25% in June, and
the probability should increase even further after today's
data," they wrote.
(Reporting by Terje Solsvik; editing by Essi Lehto and Jason
Neely)
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