Iceland raises key rate by half-point to 5.5%

Iceland's central bank on Wednesday raised its key interest rate by a half point to 5.5 percent, citing the risk of inflation following collective wage hikes. "The inflation outlook has deteriorated markedly," the bank's monetary policy committee wrote in a statement. The bank forecast the inflation rate will rise to four percent in early 2016, and predicted economic growth of four percent in 2015 and three percent in the two following years.