"Activity in the Norwegian economy appears to be lower than anticipated earlier. On the other hand, inflation has been slightly higher than projected and the krone has depreciated somewhat. Against this background, the key policy rate was left unchanged at this meeting," says Governor Øystein Olsen.

The key policy rate is low because inflation is low and because interest rates abroad are very low. At the same time, there is a substantial spread between the key policy rate and the interest rates facing households and enterprises.

Growth prospects for both Norway and the global economy have weakened slightly. Capacity utilisation in the Norwegian economy is now assessed to be close to a normal level. Wage growth has slowed. There are prospects that it will take longer for inflation to move up towards the inflation target.

"The analyses suggest that the key policy rate be kept lower than projected earlier. There are prospects that the key policy rate will remain at the current level, or somewhat lower, in the year ahead," says Governor Olsen.

At the meeting, the Executive Board decided that key policy rate should be in the interval 1%–2% in the period to the publication of the next Report on 19 September 2013, unless the Norwegian economy is exposed to new major shocks.

For further information, see "The Executive Board's assessment" in the June 2013 Monetary Policy Report with financial stability assessment.

Charts and background material