Iceland rate rise

REYKJAVIK: Iceland, whose banking crash helped trigger the 2008 global financial meltdown, on Wednesday lifted key interest rates again as economic growth was seen exceeding expectations. The bank raised its key interest rate on seven-day deposits, for the third time in five months, by 25 basis points to 5.75 per cent. The bank said GDP is projected to grow by 4.6 per cent this year, about half a percentage point more than it forecast in August and inflation was running above target. The bank added that falling oil prices and a strong Icelandic krona had somewhat dampened inflationary pressures, but only in the short term. Domestic demand is expected to rise to the tune of seven per cent this year.