Bloomberg News

Iceland’s Inflation Slows for the First Time Since January

October 27, 2011

(Updates with krona in fourth paragraph.)

Oct. 27 (Bloomberg) -- Iceland’s annual inflation rate slowed for the first time in nine months, easing pressure on the island’s central bank to raise interest rates.

Inflation slowed to 5.3 percent in October from 5.7 percent the previous month, the Reykjavik-based statistics office said today in a statement. Consumer prices rose 0.3 percent on the month, the agency said.

The central bank kept its seven-day collateral lending rate unchanged at 4.5 percent last month, while signaling further rate increases might be needed to cap inflation. The bank in August raised borrowing costs for the first time since the country’s banks collapsed almost three years ago.

The Icelandic krona strengthened 0.4 percent to 113.47 per dollar as of 11:20 a.m. London time.

--Editors: Jonas Bergman, Tasneem Brogger

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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