Iceland raises main rate 50bp as inflation persists
Inflation is falling but central bank warns “strong demand pressures” remain
The Central Bank of Iceland raised its main rate by 50 basis points on August 23, as headline inflation eased but other indicators showed persistent price rises.
The central bank’s move brought the rate to 9.25%. It was a smaller increase than the previous decision, in May, when the monetary policy committee raised the rate by 125bp.
Headline inflation eased sharply in July, falling to 7.6% from 8.9% in June. The MPC said the housing component of inflation diminished, alongside a reduction in
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