Iceland raises rates to rein in inflation / Markets surprised as Iceland acts to curb inflation

Iceland’s central bank raised interest rates by 45 basis points to a record 13.75 per cent on 1 November 2007 in an attempt to rein in stronger-than-expected inflation in its fast growing economy. The move surprised the markets, which were expecting rates to be kept on hold in the belief the economy was starting to slow and inflation was in the process of being tamed.

Central Bank of Iceland: Press Release, 1.11.07: http://www.sedlabanki.is/?PageID=287&NewsID=1579

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