(Bloomberg) -- Iceland’s inflation accelerated to its fastest pace in four months, reducing the odds that the island nation’s central bank would begin to ease western Europe’s most aggressive monetary stance.
The consumer price index rose 6.3% on year in July, according to a statement from Iceland’s statistics agency published on Wednesday, after reaching the lowest level since 2022 the previous month. The outcome, driven by housing, water and electricity costs, was above the forecast from lenders Islandsbanki hf and Landsbankinn hf which both projected a 5.9% gain.
The data contrasts with recent evidence of a cooldown in the north Atlantic economy, including a contraction in first-quarter economic output and wage growth at a four-year low. The central bank has held its key interest rate at 9.25% since last August, citing concerns over the stubbornly high inflation expectations.
--With assistance from Barbara Sladkowska.
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