Kristrún Responds to the Interest: "Nobody Said This Would Be Easy"

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Prime Minister Kristrún Frostadóttir, who had said before the 2024 parliamentary elections that the Social Democratic Party had a plan and would "nail down interest rates and inflation", is today responding to the situation that the Central Bank of Iceland's policy rate was raised following inflation rising to 5.2%, the highest since before the government took office. "I acknowledge that after the lowest inflation measurement in...

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Prime Minister Kristrún Frostadóttir says it is bad news that the Central Bank has felt compelled to raise policy rates again, even though they are still considerably lower than in the fall of 2024. She says it is clear that inflation expectations need to be lowered and that the government will not waver from its plan to operate the treasury on the right side of zero.