OSLO (Reuters) – Norway’s core inflation rate fell more than expected in December, Statistics Norway (SSB) data showed on Friday, supporting predictions that interest rates will start to decline this year.

Core inflation, which strips out changes in energy prices and taxes, stood at 2.7% annually, down from 3.0% in November and below the 2.8% expected by analysts in a Reuters poll.

Norges Bank expects core inflation to be 2.8%.

Norges Bank in December kept interest rates at a 16-year high of 4.50% and said it planned to cut rates three times by 2025, up from four cuts previously seen, with the first which termination is expected in March.

The central bank, which targets core inflation at 2.0%, said at the time that it expected the policy rate to decrease to 3.75% by the end of 2025, a blow to global monetary easing hopes.

Norges Bank is scheduled to make its next policy rate announcement on January 23.

The price of food and non-alcoholic beverages increased by 4.0% annually, making it a major contributor to inflation, SSB data showed.

Headline inflation, which includes changes in energy costs and taxes, fell in December to 2.2% from 2.4% in November, while analysts in a Reuters poll expected a reading of 2.5%. .