Prospects for economic activity have deteriorated further in recent months as headwinds to growth have become stronger. Inflation looks set to remain high for longer, eroding households’ real incomes; monetary policy is being tightened further and faster than anticipated; and the global economy now seems to be falling into a recession which will weigh heavily on export earnings. A combination of higher interest rates and falling household incomes is causing a downturn in residential property markets, particularly in Norway and Sweden.
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