GBP/NOK drifts lower, focus on cenbank meetings

The GBP/NOK currency pair edged lower on Thursday ahead of the outcome of the Bank of England’s and Norges Bank’s policy meetings.

The BoE is expected to leave its benchmark interest rate intact at 3.75% at its June 18th meeting.

Policy makers have taken a cautious stance on whether higher energy prices linked to the Iran conflict could lead to longer-lasting inflation pressures.

UK inflation has remained above the BoE’s 2% target for most of the past five years, with the central bank previously warning inflation could surge above 3.5% later in 2026.

Figures from the UK Office for National Statistics showed that headline CPI had risen 2.8% year-on-year in May, matching April’s pace. Core CPI edged up to 2.6% year-on-year from 2.5% in the prior month. These latest readings may give the BoE more room to maintain steady interest rates.

Meanwhile, Norges Bank is expected to leave its key policy rate without change at 4.25% at its June 18th meeting.

In May, the central bank unexpectedly raised its policy rate by 25 basis points to 4.25%, as it emphasized inflation remained too high and was likely to stay elevated because of the ongoing Middle East war.

Policy makers noted that a higher policy rate was necessary to drive inflation back to target within a reasonable timeframe.

Norges Bank had said it still projected a policy rate between 4.25% and 4.50% by year-end.

The GBP/NOK currency pair was last down 0.13% on the day to trade at 12.7652.