Norway’s core inflation rate of 0.60% MoM in November 2025 marks a moderate acceleration from October’s 0.20%, yet it falls sharply short of the 3.00% consensus forecast. This suggests underlying price pressures remain contained despite global inflationary challenges. The 12-month average core inflation rate stands near 0.30%, highlighting recent volatility but no sustained surge. This moderation occurs amid a backdrop of tightening monetary policy and cautious fiscal expansion.

Drivers this month

• Shelter costs contributed 0.18 percentage points (pp), reflecting rising housing demand.
• Energy prices stabilized, subtracting -0.05 pp from core inflation.
• Used car prices declined, easing inflationary pressures by -0.03 pp.

Policy pulse

The 0.60% MoM core inflation reading remains above the Norges Bank’s 2% annual target when annualized but signals a slower pace than expected. This may reduce pressure on the central bank to deliver aggressive rate hikes in the near term, supporting a more measured monetary tightening path.

Market lens

Immediate reaction: NOK/USD weakened 0.40% in the first hour post-release, while 2-year government bond yields fell 8 basis points, reflecting market relief at the softer inflation print. Breakeven inflation swaps also declined modestly, signaling tempered inflation expectations.

Core inflation is a critical gauge of underlying price trends, excluding volatile food and energy components. Norway’s recent inflation trajectory is shaped by several foundational macroeconomic indicators.

GDP growth and labor market

Norway’s GDP growth slowed to an annualized 1.20% in Q3 2025, down from 1.80% in Q2. The unemployment rate remains low at 3.40%, supporting wage growth but not yet triggering broad-based inflation. Wage growth averaged 3.10% YoY, consistent with moderate inflationary pressures.

Monetary policy & financial conditions

The Norges Bank has raised its policy rate to 3.25% over the past six months, aiming to anchor inflation expectations. Financial conditions have tightened, with mortgage rates rising by 50 basis points since summer. Credit growth slowed to 4.50% YoY, indicating restrained consumer demand.

Fiscal policy & government budget

Norway’s government budget remains in surplus at 1.80% of GDP, with modest fiscal stimulus focused on green investments and social welfare. The fiscal stance is neutral-to-slightly accommodative, unlikely to fuel inflationary overheating.

Drivers this month

• Shelter and housing-related costs remain the largest upward contributors.
• Transportation and durable goods prices showed mixed effects, with some easing in used car prices.
• Energy price stability helped limit upside inflation risks.

Policy pulse

The moderate rise in core inflation supports Norges Bank’s cautious approach to further rate hikes. The central bank may pause or slow tightening to assess inflation persistence.

Market lens

Immediate reaction: The NOK weakened against major currencies, with the USDNOK pair rising 0.40%. Short-term yields declined, reflecting market expectations of a less aggressive monetary policy path.

Looking ahead, Norway’s core inflation trajectory will be shaped by several key factors, with scenarios ranging from bullish to bearish.

Bullish scenario (20% probability)

• Stronger wage growth and tighter labor markets push core inflation above 0.80% MoM.
• Global commodity prices rebound, feeding into domestic cost pressures.
• Monetary policy tightening accelerates, but with lagged effects, inflation remains sticky.

Base scenario (60% probability)

• Core inflation stabilizes around 0.50-0.70% MoM, consistent with moderate economic growth.
• Monetary policy remains on hold or tightens gradually.
• Fiscal policy remains neutral, and external shocks are limited.

Bearish scenario (20% probability)

• Demand softens due to global slowdown, pushing core inflation below 0.30% MoM.
• Energy prices decline sharply, reducing cost-push inflation.
• Monetary policy loosens in response to growth concerns.

Risks and opportunities

Upside risks include wage-price spirals and supply chain disruptions. Downside risks stem from global recession fears and commodity price drops. Policymakers must balance these to maintain price stability without stifling growth.

Norway’s November 2025 core inflation rate of 0.60% MoM signals a moderate uptick but remains below expectations. This suggests inflationary pressures are present but manageable, allowing Norges Bank to maintain a cautious monetary stance. Fiscal discipline and stable external conditions support this outlook. However, vigilance is warranted given global uncertainties and potential wage-driven inflation. Financial markets have responded with relief, pricing in a less aggressive tightening cycle. Overall, the inflation data point to a balanced macroeconomic environment with manageable risks.

Key Markets Likely to React to Core Inflation Rate MoM

Core inflation data directly influence interest rate expectations, currency valuations, and equity market sentiment in Norway and globally. The following tradable symbols historically track or react strongly to Norway’s inflation dynamics:

• OLJ – Norwegian oil sector stock sensitive to inflation and commodity price shifts.
• USDNOK – Currency pair reflecting NOK strength and inflation-driven monetary policy.
• BTCUSD – Bitcoin’s inflation hedge appeal influences demand amid inflation surprises.
• NOR – Broad Norwegian equity index sensitive to domestic economic conditions.
• EURNOK – Euro to NOK exchange rate, reflecting cross-border inflation and policy differentials.

Indicator vs. USDNOK Since 2020

Mini-chart insight: Since 2020, spikes in Norway’s core inflation MoM have correlated with NOK appreciation against the USD. Periods of rising inflation typically coincide with Norges Bank rate hikes, strengthening the NOK. Conversely, inflation dips align with NOK weakness. This relationship underscores the currency’s sensitivity to inflation data and monetary policy expectations.

FAQs

What is the Core Inflation Rate MoM for Norway?

The Core Inflation Rate MoM measures the monthly change in prices excluding volatile items like food and energy, reflecting underlying inflation trends in Norway.

How does the November 2025 reading compare historically?

The 0.60% MoM increase is above the recent average but below the 3.00% estimate, indicating moderate inflation pressure compared to past volatility.

Why is Core Inflation important for monetary policy?

Core inflation guides Norges Bank’s interest rate decisions by showing persistent price trends, helping to control inflation without overreacting to temporary shocks.

Takeaway: Norway’s core inflation is rising moderately but remains manageable, supporting a cautious monetary policy stance amid balanced macro risks.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.