Bias: range-bound, current GBP/NOK sits above its 90-day average and in the upper half of the 3-month range, but mixed policy signals and oil dynamics argue against a clear trend.
Key drivers:
• Rate gap: BoE’s easing path versus Norges Bank’s hold widens the policy gap in favour of the krone, likely limiting gains for GBP.
• Risk/commodities: Oil is trading firmer with notable volatility; as Norway is a big oil exporter, higher oil prices tend to support the NOK.
• Macro factor: UK GDP growth is projected to slow in 2026, weighing on the pound.
Range: GBP/NOK is expected to drift within the recent 3-month range, with limited movement outside.
What could change it:
• Upside risk: stronger-than-expected UK data or a slower BoE pace of easing could lift GBP.
• Downside risk: oil prices retreat and expectations of earlier Norwegian rate cuts could weigh on the krone.