Norway has raised interest rates from 1.25% to 1.5%, making it the first European country to do so since the beginning of the credit crunch.
It said the increase was due to the fact unemployment was "considerably lower than previously projected", while inflation was higher, the BBC reports.
Norwegian central bank governor Svein Gjedrem announced rates would continue to rise gradually, saying: "Activity in the Norwegian economy has picked up more rapidly than expected. Developments indicate that it is appropriate to raise the key policy rate now."
Earlier this month, Australia became the first of the G20 countries to raise its interest rate since the financial crisis began from 3% to 3.25%.
The UK base rate remains at a historic low of 0.5%.
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