GBP/NOK settles above 18-month low, posts weekly gain

The GBP/NOK currency pair settled above recent low of 13.3062, its weakest level since March 8th 2024, in the wake of the Bank of England’s and Norges Bank’s policy decisions.

The Bank of England left its benchmark interest rate without change at 4% at its September 18th meeting.

Two policy makers voted in favor of a 25 basis point rate cut, while seven voted for leaving rates on hold.

The central bank cited progress in disinflation after past shocks, underpinned by restrictive policy.

Yet, inflation, at 3.8% in August, has remained above target and is projected to rise slightly in September before easing back toward 2%.

Wage growth, while still elevated, has slowed and is expected to ease further.

BoE policy makers also highlighted a gradual, data-driven approach with no pre-set trajectory for rate cuts.

Meanwhile, Norges Bank lowered its key policy rate by 25 basis points to 4% at its September meeting, as anticipated.

It has been the second rate cut in five years after the brief pause in August.

Norges Bank signaled that it would continue easing policy next year in case the economy developed as expected.

The central bank noted that the policy rate would likely be gradually reduced to 3% in upcoming years, while inflation is forecast to steady near 2% by 2028.

The exotic Forex pair gained 0.22% for the week.