- Inflation is moving up. Various measures of inflation are slightly divergent, but on the whole underlying inflation is close to 2.5 per cent, says Deputy Governor Jan F. Qvigstad.

Capacity utilisation is high, and the labour market remains tight. The first wage settlements indicate as expected that wage growth is picking up. House prices have risen again after declining for several months. Oil prices remain high. The krone depreciated in March, but appreciated again in April.

On the other hand, the US economy is weak. Financial markets are still turbulent and global economic growth may turn out to be weaker than previously assumed. 

The strategy in Monetary Policy Report 1/08 is that the key policy rate should be in the interval 5 – 6 per cent in the period to the publication of the next Report on 25 June, unless the Norwegian economy is exposed to major shocks. 

- New information since the previous monetary policy meeting does not on balance warrant a deviation from this strategy. Higher interest rates will contribute to a gradual decline in capacity utilisation, so that inflation does not become too high, says Jan F. Qvigstad.  
 
For more information, see “The Executive Board’s monetary policy decision – background and general assessment”.

Charts and background material