Central Bank of Iceland Holds Key Rate at 7.5%

Central Bank of Iceland Holds Key Rate at 7.5%

The Central Bank of Iceland held its key policy rate steady at 7.5% in its October 2025 meeting, reflecting a cautious stance amidst ongoing inflationary pressures. Inflation rose to 4.1% in September, marking the highest level in three months, up from 3.8% in August and surpassing the central bank's 2.5% target. Despite a slowdown in economic activity and easing demand pressures in recent quarters, the economy has shown resilience. Wage growth remains robust, and although inflation expectations have recently eased, they continue to exceed the target. The central bank highlighted that future policy decisions will remain contingent on economic trends, inflation, and inflation expectations.

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