Reykjavik (IFN) Iceland's annual inflation rate will accelerate to 7.1% in May from 5.5% in April on rising petrol and housing prices, Kaupthing Bank said on Monday.
The bank expexts inflation to continue rising in coming months, but adds that Iceland's central bank has been steadily raising interest rates to hold down rising housing prices.
Analysts expect the central bank to raise interest rates by 50-75 basis points on May 18 from 11.5%.
Rates were hiked by 75 basis points on March 30 in a move to cool the country's booming economy and rising inflation.
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