GBP/NOK settles above 1-year low, posts weekly gain

The GBP/NOK currency pair settled above recent low of 13.3303, its weakest level since June 21st 2024, in the wake of Norges Bank’s and the Bank of England’s policy decisions.

Norges Bank lowered its key policy rate by 25 basis points to 4.25% at its June meeting, confounding market consensus of a hold.

The central bank has kept borrowing costs at a 15-year high of 4.50% since December 2023.

Norges Bank said it might deliver more rate cuts by the end of this year, in case the economy developed as expected.

Yet, it cautioned that heightened uncertainty prevented it from committing to a particular rate path.

In the meantime, the Bank of England left its benchmark interest rate without change at 4.25% at its June meeting, as it cited a challenging backdrop of heightened global uncertainty and persistent inflationary pressures.

Three MPC members voted in favor of a 25 bps rate cut to 4%.

The BoE said that consumer inflation was likely to remain broadly at current levels for the rest of 2025 before easing toward the target in 2026.

Still, the BoE warned of “two-sided risks to inflation,” expressing concern over rising energy prices amid escalating Middle East tensions and potential trade disruptions from US tariffs.

The GBP/NOK currency pair settled 0.53% higher at 13.5970 on Friday.

The exotic Forex pair gained 1.18% for the week.