COPENHAGEN, Denmark (AP) — Norway’s central bank said Thursday that it is raising its key interest rate by a quarter-percentage point to combat high inflation.

Norges Bank is hiking the rate to 4%, the highest level since 2008. It says inflation — which reached 5.4% in July — ”has edged down but remains high and markedly above the target” of 2%.

“A somewhat higher policy rate is needed to bring inflation back to target,” according to the central bank.

Bank Gov. Ida Wolden Bache said ”the future policy rate path will depend on economic developments” and added that the rate would most likely be raised again next month.

“If the economy evolves as currently anticipated, the policy rate will be raised further in September,” she said in a statement.

The bank noted that activity in the Norwegian economy, which is not part of the European Union, remains high.

Central banks around the world have been raising borrowing costs to target painful spikes in consumer prices fueled by the economic rebound from the COVID-19 pandemic and then Russia’s war in Ukraine, which drove up the costs of food and energy.

Norway’s central bank began hiking its policy rate from zero in September 2021.