Nordic Banks Hike Rates Amid War-Driven Inflation Fears

Nordic central banks in Norway and Sweden are raising interest rates to combat rising inflation caused by the ongoing conflict in the Middle East. Norway's Norges Bank has already raised its policy rate, while Sweden's Riksbank is expected to follow suit before the end of the year.

The two countries' central banks warned that higher fuel prices as a result of the conflict are slowing down the return of inflation to their 2% target. 'By raising the policy rate, we are helping to reduce inflation,' said Norges Bank Governor Ida Wolden Bache.

Investors expect another rate hike in Norway and four more in Sweden by the end of spring. The move is part of a global effort by central banks to combat war-led inflation, with major economies such as the US, Europe, and Japan also raising interest rates this month.