Norges Bank left its policy rate unchanged at 4.5% and delivered a surprise by pushing back the likely timing of the first cut, foreseeing no move lower through to the end of 2024 and it did not rule out a hike.

Governor Ida Wolden Bache said that if the economy evolved as expected "the policy rate will continue to lie at 4.5% to the end of the year."

Previously, Norges Bank had left the door open to a cut in September while some analysts had predicted a later move, possibly in December, but the new rate path and guidance suggests that the first come may not materialize until 2025, with the policy rate eased gradually through next year.

If the krone were to depreciate and wage and price inflation were to remain elevated then the policy rate could be raised, Norges Bank stated. (see MNI INTERVIEW: Norges Bank Needs Scenarios For Krone Weakness)