“Inflation is too high. It will likely be necessary to keep the policy rate elevated for a time, and we are prepared to raise the policy rate if needed to bring inflation down to target within a reasonable time horizon”, says Governor Ida Wolden Bache.

Inflation has been above target for several years. Capacity utilisation in the Norwegian economy has declined and appears to be slightly below a normal level. At the monetary policy meeting in September, the policy rate was raised to 4.5%, and the Committee judged that it would likely be necessary to keep the policy rate elevated for a time. Since September, the Committee has noted the following:

• The conflicts in the Middle East are still creating substantial uncertainty about the inflation outlook. Oil spot prices have fallen, but futures prices have increased somewhat. Spot and futures prices for gas and electricity have moved up. Indicators of external price impulses to Norwegian imported goods have risen further as expected. The krone has appreciated and is stronger than assumed. In Norway, inflation has evolved broadly as projected. Twelve-month CPI inflation was 3.4% in September, while CPI inflation adjusted for tax changes and excluding energy products (CPI-ATE) was 3.0%. Domestically produced goods and services inflation remains elevated and has been higher than projected in the September Report.
• Both LFS data and registered unemployment statistics indicate little change in unemployment in recent months. Registered unemployment has been a bit lower than projected. Preliminary figures for the number of salaried employees indicate that employment has increased a little more than expected.

The Committee judges that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon. Inflation remains markedly above target, and the rapid rise in business costs in recent years will likely contribute to keeping inflation elevated ahead. High inflation over time can make inflation stickier and harder to bring down again. At the same time, the Committee does not want to restrict the economy more than needed.

The Committee has not received information indicating that the outlook for the Norwegian economy has changed materially since its monetary policy meeting in September. The Committee’s current assessment of the outlook implies that it will likely be necessary to keep the policy rate elevated for a time. The Committee is prepared to raise the policy rate if warranted by the inflation outlook.

The future path of the policy rate will depend on how the economy evolves. The Committee will have received more information about economic developments ahead of its next monetary policy meeting in December, when new forecasts will also be presented.

New forecasts were not prepared for this meeting. Monetary Policy Report 4/26 will be published together with the policy rate decision on 17 December 2026.