”The prospects for the world economy have weakened considerably in the course of summer. External developments and the turbulence in financial markets are also affecting the domestic outlook. Against this background, we have chosen to leave the key policy rate unchanged at this meeting,” says Deputy Governor Jan F. Qvigstad.

The turbulence linked to the European debt crisis has intensified. Growth is weak and there are prospects that key rates abroad will be very low over several years ahead. Developments in the Norwegian economy remain favourable, but output and demand for goods and service have also been somewhat weaker than expected at home. Consumer price inflation has slowed. “The key policy rate is low. Our analysis in June implied a gradual increase in the key policy rate through the final half of the year. The turbulence and uncertainty abroad, combined with lower inflation and weaker prospects at home, suggest that the key policy rate should be kept low for a longer period than expected in June” says the Deputy Governor.

For further information, see "The Executive Board’s monetary policy decision – background and general assessment" and “The Executive Board’s assessment” in the June 2011 Monetary Policy Report.

• Charts and background material