June 29, 2018 / 7:10 AM / 5 months ago

Norway retail sales stronger than expected in May, boosting rate hike outlook

OSLO, June 29 (Reuters) - Norwegian retail sales rose for a third consecutive month in May and was significantly stronger than expected by economists, supporting the central bank’s plan to hike rates in September.

Seasonally adjusted retail sales jumped 1.8 percent in May from April, Statistics Norway said, against expectations in a Reuters poll of a 0.3 percent rise.

Growth for the previous month was meanwhile revised upwards to 0.7 percent from 0.6 percent.

The Norwegian crown briefly strengthened to 9.4570 against the euro from 9,4695 just ahead of the 0600 GMT data release, before easing to 9.4780 by 0700 GMT.

“The figures are volatile, but in isolation they support Norges Bank’s view that rates should rise from September,” DNB Markets economist Kyrre Aamdal said.

The Norwegian deposit rate is at a record-low of 0.50 percent, and the central bank plans to tighten policy as the economy continues to recover from a slump.

Separately, the broader goods consumption index grew by just 0.1 percent in May, slowed down by a drop in electricity consumption due to unseasonably warm weather. (Reporting by Camilla Knudsen, editing by Terje Solsvik)

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