Interest rate pressure relieved for now

Investors and borrowers in Norway breathed a sigh of relief as a relaxing labour market removed the immediate pressure for higher interest rates.

The Norwegian Bureau of Statistics reported that unemployment rose from 3.2 percent to 3.4 percent in the fourth quarter, meaning that companies will have an easier time filling positions without resorting to wage hikes that could stimulate inflation. "If this trend continues, we have seen the peak in interest rates," Kyrre Aamdal of DnB Markets told Dagens Næringsliv. On the other hand, the newspaper reported, the Labour Party government's budget proposal for 2001 would have the effect of tightening the labour market back up again if the proposal is enacted by the parliament.