Norway's May core inflation rises unexpectedly to 3.4%

OSLO, June 10 (Reuters) - ‌Norway's annual ​core ​inflation rate rose unexpectedly in May, Statistics Norway (SSB) data showed on Wednesday, supporting expectations ‌interest rates could increase further this year.

Core inflation, ⁠which strips out changing energy prices and taxes, stood at ‌3.4% year-on-year, up from ‌3.2% in April, and above the 3.2% expected by analysts in a Reuters poll.

Norges Bank had expected ​core inflation of 3.3%.

Norway's currency, the crown, strengthened to 10.96 against the euro by 0609 GMT, ⁠from 11.00 ahead of the data release.

Norway's central bank last month ​raised its policy interest rate by 25 basis points to 4.25%, moving sooner than analysts ​had expected, to quell resurgent ‌inflation driven by increasing wages and high energy prices.

The central bank's decision stood ⁠in contrast with those of other major central banks, which have argued that more time and data were needed ⁠to gauge the impact of the war in Iran on ​the longer horizon that is relevant for policymakers.

Norges Bank, which targets inflation of 2%, is scheduled to make its next ‌policy rate announcement on June 18.

The often volatile headline inflation, which includes changes in ‌energy costs and taxes, eased in May to ⁠3.1% from 3.4% in ‌April. Analysts in ​a Reuters poll had expected a reading of 3.1%.

(Reporting by Louise Rasmussen, editing by Terje ‌Solsvik)

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