Norges Bank operates a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment. In general, the direct effects on consumer prices resulting from changes in interest rates, taxes, excise duties and extraordinary temporary disturbances are not taken into account.
In real time it will always be difficult to determine which price movements are permanent and those which only have short-term effects on the Consumer Price Index (CPI). There is no one indicator that provides a precise picture of underlying inflationary pressures in all situations. Different measures of underlying inflation are discussed in the Monetary Policy Report.
The chart below shows inflation over the past two years in per cent and the projection for the period ahead. Inflation is measured as the year-on-year rise in the CPI and CPIXE (1). The continuous lines illustrate the actual development in the inflation, while the broken lines illustrate Norges Bank’s projections.
1) CPIXE: CPI adjusted for tax changes and excluding temporary changes in energy prices
CPI projections from Monetary Policy Report
CPIXE projections
Sources: Statistics Norway and Norges Bank
Monetary Policy Report with charts in Excel and HTML