Housing costs 'underestimated' in interest rate debate

Housing costs in Iceland, particularly rents, are an underestimated contributor to inflation and consequently to policy rate decisions, says economist Ólafur Margeirsson. Interest rates were raised this week from 7.75% to 8%. The Governor of Seðlabanki Íslands (Central Bank of Iceland) cited rising inflation, which can be attributed in part to wage increases in the public sector, higher public…