The Central Bank of Iceland will increase the policy rate by another 0.5 percent on December 20, if a new economic forecast from Kaupthing Bank’s research department proves right.
“The Central Bank will add a belated 95 penalty points to the economy during this short phase of increased interest rates,” said the forecast, Fréttabladid reports.
According to the research department, new wage contracts and large-scale industrial projects will incite the Central Bank to make this decision.
The increase in the policy rate may be postponed until early next year, Kaupthing Bank reasons, if new wage contracts and decisions on large-scale industry have not been made by December 20.
Click here to read more about the policy rate.