Consumer Price Index Hits a 17-Year High Skip to content

Consumer Price Index Hits a 17-Year High

By Iceland Review

The Icelandic consumer price index rose by 0.65 between October and November, which is the highest increase of the index in November for 17 years. Glitnir and Kaupthing Banks say the high policy rate is probably to blame.

Iceland’s Central Bank decided to increase the policy rate by 0.45 percent earlier this month, against expectations, and the policy rate is now set at 13.75 percent.

According to Morgunbladid, Minister of Commerce Björgvin G. Sigurdsson aims to investigate whether real estates should be removed from the consumer price index, because that part of the index has increased the most, by 0.36 percent between months.

So far this year the consumer price index has gone up by 4.8 percent and the price of real estate has increased by 18.4 percent at the same time. The inflation is currently at 5.2 percent, way over the Central Bank’s inflation goal of 2.5 percent.

Click here to read more about the policy rate.

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