Island Zinssatz

Iceland’s Central Bank cut its key interest rate by 50 bps to 8.0%, aligning with market expectations, after inflation fell to 4.6% in January, with underlying inflation at its lowest in three years. Policymakers added that further disinflation is anticipated in the coming months. Meanwhile, economic growth has slowed due to tight monetary policy, narrowing the positive output gap. The housing market has cooled, with slower price increases. However, economic activity appears stronger than early estimates suggested, and wage costs continue to rise. Looking ahead, the central bank said future policy decisions will be guided by economic activity, inflation trends, and expectations.