Norway expats could make larger international payments

Expats living in Norway may soon need to make bigger money transfers to pay off loans held in the country, it has emerged.

Norges Bank recently announced interest rates will rise by 0.25 per cent to 1.5 per cent.

Svein Gjedrem, chairman of the organisation's executive board, explained the move was down to an increase in inflation and lower unemployment figures than previously forecast.

The central bank is the first in Europe to raise interest rates, with further hikes expected by next March, if the country's economy remains strong.

Mr Gjedrem said: "Activity in the Norwegian economy has picked up more rapidly than expected. Developments indicate that it is appropriate to raise the key policy rate now."

Elsewhere, Germany's government recently announced plans to cut tax rates by €24 billion (£21.8 billion) to stimulate the country's economy.

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By John Mills