Interest, Storebrand | 800,000 Norwegians: We cannot stand today’s interest rate level

Interest rates are now much higher than the experts ever thought they would be.

We are not going back more than a year and a half before Norges Bank did not think the policy rate would be higher than 3 per cent. Now it is 4.5 per cent, and they have announced that it will remain at that level for a long time. Norges Bank’s next interest rate meeting is on Friday.

Fewer and fewer economists believe that there will be an interest rate cut at all this year, and Handelsbanken has even hinted at the possibility that interest rates may even have to be raised.

Also read: Storbank: – Probably no interest rate cut this year

Norwegians at the limit of endurance

In a new survey from YouGov for Storebrand, it appears that many Norwegians are now completely at the limit of their tolerance.

19 percent – ​​corresponding to 800,000 Norwegians – answer no to the question of whether their economy will withstand the current interest rate level in the long term.

Four percent – ​​158,000 people – say that the situation is now so bad that they are considering selling their home.

The figures agree well with the report that came out recently which showed that close to a million Norwegians would not be able to handle an unexpected extra expense of NOK 20,000 without taking out a loan.

Read also: Dramatic Statistics Norway report: 970,000 Norwegians have reached this limit

Should interest rates rise, it is even worse: 4 out of 10 say that they would be “quite” or “very” worried about their own finances if mortgage interest rates were to end up at around 6 per cent during the year.

For most people, this means in practice one to two interest rate increases.

Read also: Statistics Norway: The banks are increasing the margins on mortgages

Bigger differences

At the same time that many now say that they are at the limit of tolerance, new statistics show that at the same time a lot of money is flowing into the fund market.

According to figures from the Verdipapirfondenes forening, Norwegians have put NOK 12.6 billion into funds (net deposits) so far this year. The vast majority are mutual funds.

– We have long seen a dichotomy in Norwegian business life – some companies are doing very well, while others are struggling. Now we see the same development among private individuals, says savings economist Fredrikke Gregorson at Storebrand.

– The bright spot for those who are struggling is that the salary settlement seems to be good this year. So far, the wage settlement has resulted in a wage increase of over 5 per cent for large groups in society. For the first time in several years, the wage settlement can provide increased purchasing power, given that the general price level in society does not rise more than wage growth.

At the same time, she points out that many people seem to get an extra payment within a short time:

– According to the Swedish Tax Agency, 2.7 million Norwegians are likely to get money back from their tax. If you are among these, then use the opportunity to set aside money either in a savings account or in a fund. The same tip applies if you expect some “extra” holiday money in June.