The Central Bank of Iceland has sent the Government a public report after inflation in June 2025 rose above the inflation target’s deviation threshold, triggering a formal reporting obligation. Under a joint declaration by the Bank and the Government dated 27 March 2001, the inflation target is 2.5%, and if inflation deviates by more than 1.5 percentage points in either direction the Bank must explain the reasons for the deviation, how it intends to respond, and how long it expects it will take to return inflation to target. The Bank also published a letter to the Prime Minister and referenced related supporting material including Monetary Bulletin 2025/2, a Monetary Policy Committee statement dated 21 May 2025, and minutes dated 19–20 July 2025.
Central Bank of Iceland 2025-07-09
Central Bank of Iceland submits mandatory report to Government after June 2025 inflation exceeds the target
The Central Bank of Iceland reported to the Government after June 2025 inflation exceeded the target deviation threshold, requiring an explanation and response plan under a 2001 joint declaration. The Bank also released a letter to the Prime Minister and referenced supporting materials, including the Monetary Bulletin 2025/2 and recent Monetary Policy Committee documents.