As the week came to an end the Pound to Norwegian Krone exchange rate fell as the UK currency was softened by the victory of anti-EU party UKIP in the Rochester and Strood by election.
The Pound to Norwegian Krone (GBP/NOK) exchange rate softened early on Thursday as data showed that Scandinavia’s richest nation saw its economic growth slow less than economists had forecast.
Despite tumbling oil prices, Norway’s economy has remained resilient despite being a major exporter of the commodity. Data released by the Oslo based Statistics Norway showed that the nation’s economy expanded by 0.5% in the third quarter, the figure beat economist expectations for a rise of 0.3%, but was a drop from the previous quarters strong performance of 0.9%.
On an annual basis Norway’s economy expanded by 2.1%, a sharp rise from the -0.3% figure seen previously and was better than forecasts for a figure of 1.53%. The positive data caused some economists that the Norwegian central bank could consider raising interest rates but others are not so sure.
‘We don’t think Norges Bank is willing to take the risk to signal an earlier rate hike than they forecast in September given the fact that there are a lot of uncertainties in Europe, the drop in oil prices and that oil activity in Norway is already sliding downwards,’ said Marius Gonsholt Hov, an economist at Svenska Handelsbanken AB.
Despite the positive GDP figure, the Norwegian economy is facing headwinds. Recent data has shown that the nation’s oil sector declined for a fifth consecutive month and consumer spending and investment softened.
Further gains for the Krona against the Pound were somewhat restrained due to the release of better than expected retail sales data out of the UK.
The positive impact of the sales data was lessened however as economists grew concerned that prices continued to fall, adding to last week’s warning by the Bank of England (BoE) that the UK is set to see inflation weaken over the coming months.
According to the data released by the Office for National Statistics, prices fell by 1.5% last month.
