* Core inflation 1.1 pct yr/yr vs forecasts for 1.3 pct
* Other weak data also point to slower rate hikes
OSLO Jan 10 Norwegian inflation slowed more
than expected in December, giving the central bank another
reason to postpone an interest rates hike otherwise expected
Annual core inflation, a key measure watched by the bank
when making rate decisions, slowed to 1.1 percent from 1.3
percent in November, missing expectations for an unchanged rate
and staying well clear of the central bank's 2.5 percent target.
"In addition to the other figures we have had this week,
manufacturing production and weak retail sales, all points in
the direction of a lower interest rate path," Handelsbanken
senior economist Ida Wolden Bache said.
"We don't think Norges Bank (the central bank) will be in a
hurry to raise interest rates," she added.
Indeed, a string of recent data have indicated that Norway,
one of Europe's top economic performers, is feeling the pain of
Unemployment unexpectedly rose, manufacturing output outside
the lucrative oil sector fell and households, usually big
spenders, reined in consumption as attitudes grew more cautious.
All of these point to a delay in Norges Bank's rate hike,
tentatively expected between March and September.
The bank is keen to raise rates to cool a red hot property
market as exceptionally low rates encourage households to pile
But a hike would strengthen the currency, cutting inflation
further, even as it is expected to undershoot its target for
Although headline inflation, which includes more volatile
items such as energy, came in line with expectations at 1.4
percent, it also remained well below the bank's target.
Still, despite recent weakness, Statistics Norway expects
the economy to expand by 2.9 percent this year, well outpacing
the euro zone, which is struggling to climb out of a recession,
it said earlier.