Rate decision August 2026
At its meeting on 12 August 2026, the Committee decided to keep the policy rate unchanged at 4.25%.
Rate decision - press release
Policy rate kept unchanged at 4.25 percent
Norges Bank’s Monetary Policy and Financial Stability Committee decided to keep the policy rate unchanged at 4.25% at its meeting on 12 August.
“Inflation has slowed and been lower than projected this summer. Slower inflation is welcome news, but inflation is still too high, and it is too early to conclude that the inflation outlook has changed materially. It may thus still become necessary to raise the policy rate”, says Governor Ida Wolden Bache.
Inflation has been above target for several years. Capacity utilisation in the Norwegian economy appears to be close to a normal level but is drifting down. At the monetary policy meeting in June, the Committee’s assessment was that it would likely be necessary to raise the policy rate further at one of the forthcoming monetary policy meetings. Since June, the Committee has noted the following:
- Inflation has slowed and been lower than projected. In July, 12-month CPI inflation was 3.0%, and CPI inflation adjusted for tax changes and excluding energy products (CPI-ATE) was 2.7%. The conflict in the Middle East is still creating uncertainty about the inflation outlook. Oil spot and futures prices have shown little change since June, while gas prices have risen somewhat. External price impulses to Norwegian imported goods overall appear to have evolved broadly as expected. The krone weakened earlier this summer but has since appreciated a little again and is now broadly in line with that assumed in June.
- Capacity utilisation in the economy appears to have evolved broadly in line with projections. Both registered unemployment and LFS unemployment have changed little in recent months. Prices in the secondary housing market fell markedly in July, and construction activity remains low.
The Committee judges that a restrictive monetary policy stance is still needed to bring inflation down to target within a reasonable time horizon. The Committee does not want to restrict the economy more than needed. At the same time, inflation is still markedly above target, and the rapid rise in business costs in recent years will contribute to keeping inflation elevated ahead. High inflation over time can lead households and firms to begin planning for persistently high inflation. Inflation may then become stickier and harder to bring down again.
The future path of the policy rate will depend on economic developments. Inflation has been lower than projected, but it is too early to conclude that the inflation outlook has changed materially since June. New forecasts will be presented at the monetary policy meeting in September.
New forecasts were not prepared for this meeting. Monetary Policy Report 3/26 will be published together with the policy rate decision on 24 September 2026.
Rate effective from 14 August 2026:
- Policy rate: 4.25%
- Overnight lending rate: 5.25%
- Reserve rate: 3.25%
Contact:
Press telephone: +47 21 49 09 30
Email: presse@norges-bank.no
Press conferanse - video
Governor Ida Wolden Bache: Press conference on 13 August at 10.30 am (In Norwegian)
Press conference - Introductory statement by Governor Ida Wolden Bache
Policy rate kept unchanged at this meeting
Introductory statement by Governor Ida Wolden Bache at the press conference following the announcement of the policy rate on 13 August 2026.
Chart: Policy rate kept unchanged at this meeting
The Monetary Policy and Financial Stability Committee has decided to keep the policy rate unchanged at 4.25 percent.
Norges Bank is tasked with keeping inflation close to 2 percent over time. We are also mandated to help keep employment as high as possible and to promote economic stability.
Inflation has been above target for several years, and at the monetary policy meeting in June, we expected that a somewhat tighter monetary policy stance would be needed to bring inflation down to target within a reasonable time horizon.
Inflation has slowed and been lower than projected this summer. Slower inflation is welcome news, but inflation is still too high, and it is too early to conclude that the inflation outlook has changed materially. It may thus still become necessary to raise the policy rate.
Let me say a bit more about the Committee’s assessments.
Chart: Inflation is still above target
In July, consumer price inflation was 3 percent. Excluding tax changes and energy products, inflation was 2.7 percent. Inflation thus remains markedly above target.
An important reason why inflation has remained elevated in recent years is that firms’ labour costs have risen substantially. The rapid wage growth behind us will likely continue to contribute to keeping inflation elevated ahead.
The conflict in the Middle East is creating uncertainty about the inflation outlook. Shipping traffic through the Strait of Hormuz remains limited, and oil price volatility has been substantial through summer. Oil prices have shown little change since June, while gas prices have risen somewhat. External price impulses to Norwegian imported goods overall appear to have evolved broadly as expected. The krone weakened earlier this summer but has since appreciated a little again and is now broadly in line with that assumed in June.
Chart: Unemployment has changed little through summer
Activity in the Norwegian economy appears to have evolved broadly as expected. Private consumption appears to have increased, while residential construction has remained low. House prices fell in July and are lower than expected.
Unemployment is currently neither especially high nor unusually low and has changed little since our previous meeting.
Chart: It may still become necessary to raise the policy rate
When we set the policy rate, we emphasise avoiding a stance that could restrict the economy more than needed. At the same time, the Committee places emphasis on the fact that high inflation over time can lead households and firms to begin planning for persistently high inflation. Inflation may then become stickier and harder to bring down. We judge that a restrictive monetary policy stance is still needed to bring inflation down to target within a reasonable time horizon.
The future path of the policy rate will depend on economic developments. Our mission stands firm, and we will set the policy rate so that inflation returns all the way back to the 2 percent target.
The introduction will be published when the press conference starts at 10.30 am.
Monetary policy statement
Norges Bank’s Monetary Policy and Financial Stability Committee decided unanimously to keep the policy rate unchanged at 4.25% at its meeting on 12 August. The future path of the policy rate will depend on economic developments. Inflation has been lower than projected, but it is too early to conclude that the inflation outlook has changed materially since June.
Norges Bank is tasked with keeping inflation low and stable. The operational target is inflation of close to 2% over time. We are also mandated to help keep employment as high as possible and to promote economic stability.
Inflation has been above target for several years. Capacity utilisation in the Norwegian economy appears to be close to a normal level but is drifting down. At the monetary policy meeting in June, the Committee’s assessment was that it would likely be necessary to raise the policy rate further at one of the forthcoming monetary policy meetings. Since June, the Committee has noted the following:
- Inflation has slowed and been lower than projected. In July, 12-month CPI inflation was 3.0%, and CPI inflation adjusted for tax changes and excluding energy products (CPI-ATE) was 2.7%. The conflict in the Middle East is still creating uncertainty about the inflation outlook. Oil spot and futures prices have shown little change since June, while gas prices have risen somewhat. External price impulses to Norwegian imported goods overall appear to have evolved broadly as expected. The krone weakened earlier this summer but has since appreciated a little again and is now broadly in line with that assumed in June.
- Capacity utilisation in the economy appears to have evolved broadly in line with projections. Both registered unemployment and LFS unemployment have changed little in recent months. Prices in the secondary housing market fell markedly in July, and construction activity remains low.
The Committee judges that a restrictive monetary policy stance is still needed to bring inflation down to target within a reasonable time horizon. The Committee does not want to restrict the economy more than needed. At the same time, inflation is still markedly above target, and the rapid rise in business costs in recent years will contribute to keeping inflation elevated ahead. High inflation over time can lead households and firms to begin planning for persistently high inflation. Inflation may then become stickier and harder to bring down again.
The Committee decided to keep the policy rate unchanged at 4.25%. The future path of the policy rate will depend on economic developments. Inflation has been lower than projected, but it is too early to conclude that the inflation outlook has changed materially since June. New forecasts will be presented at the monetary policy meeting in September.
Ida Wolden Bache
Pål Longva
Øystein Børsum
Hilde C. Bjørnland
Steinar Holden
12 August 2026
Summary of the Committee’s deliberations
Monetary policy decision, 12 August 2026
At its meeting on 12 August, Norges Bank’s Monetary Policy and Financial Stability Committee decided to keep the policy rate unchanged at 4.25 percent. This is a summary of the deliberations and assessments at the meetings leading to the policy rate decision.1
New forecasts were not prepared for this meeting. New information was assessed against the projections in Monetary Policy Report 2/26, which was published on 18 June 2026. The June policy rate forecast is just above 4.5 percent at the end of this year. With a policy rate in line with the June forecast, inflation was projected to decline from next year and reach 2.0 percent in 2029, and registered unemployment was expected to edge somewhat higher.
International economy and financial markets
In its discussion, the Committee was concerned with the uncertainty surrounding the global economic outlook. Shipping traffic through the Strait of Hormuz remains limited, and oil price volatility has been substantial through summer. Oil spot and futures prices are now close to the level at the time of the previous Report, while gas prices have risen somewhat. Futures prices still indicate that oil and gas prices will decline somewhat ahead. Freight rates are slightly higher than in June. External price impulses to Norwegian imported goods overall appear to be broadly as projected in the June Report.
There is still uncertainty about future tariff rates. In July, the US imposed new tariffs on imports from a series of countries, including Norway, to replace the temporary tariffs introduced in February. The tariff changes since the previous Report are likely to have a limited effect on the Norwegian and global economy.
Market-implied policy rate expectations abroad have increased a little since the June Report, while short-term expectations have fallen somewhat for the Norwegian policy rate. Euro area interest rates were raised ahead of summer, and the market has priced in rate hikes in several countries this autumn, including Norway. Long-term interest rates have risen in many countries. The krone weakened earlier this summer but has since appreciated a little again. Measured by the import-weighted exchange rate index (I-44), the krone is broadly as projected in the June Report.
Activity in the Norwegian economy and the labour market
The Committee noted that capacity utilisation still appears to be close to a normal level. The overall labour market appears to have evolved broadly in line with expectations. Registered unemployment was 2.1 percent in July, as projected in the June Report. According to the Labour Force Survey (LFS), unemployment has remained stable in recent months.
Since the June Report, there has been little new information on demand from households and firms. Indicators that have come in, for example indicators of retail sales and new car registrations, suggest that consumption has increased broadly as assumed in June.
Turnover in the secondary housing market has declined this summer, and house prices fell markedly in July. Some Committee members expressed concerns regarding the persistently low level of construction activity and that lower house prices could dampen activity further.
Inflation
The Committee gave attention to the fact that inflation has been lower than projected. Twelve-month CPI inflation adjusted for tax changes and excluding energy products (CPI-ATE) has fallen and was 2.7 percent in June and July. In July, inflation was 0.6 percentage point lower than projected. The rise in prices for both imported consumer goods and domestically produced goods and services has slowed and was lower than expected. The Committee noted that the average of the different underlying inflation indicators has fallen less and was somewhat higher than CPI-ATE inflation. Higher prices for electricity and electricity distribution contributed to lifting total CPI inflation to 3.0 percent in July, which was broadly as projected.
Members discussed whether the lower inflation rate was due to temporary conditions, or whether it indicates that inflation will come down faster than projected. The Committee noted that CPI-ATE inflation has primarily been driven down by a slower rise in prices for food and beverages and ICT equipment, but also by lower price rises for several other goods and services components. Members noted that imported inflation has now fallen back again after having risen earlier this year and discussed, among other things, whether the krone exchange rate pass-through may differ from that assumed in the analyses.
Members noted that according to Norges Bank’s System for Model Analysis in Real Time (SMART), which weights together forecasts from a broad set of models, the inflation forecasts for the coming quarters have been revised down since June. At the same time, the Committee noted that the underlying drivers of inflation appear to be little changed since June. Both external price pressures and the krone exchange rate have been broadly as projected. There is little new information on wage growth. Committee members gave attention to the fact that the rapid rise in business costs will contribute to keeping inflation elevated ahead.
Monetary policy stance
In deliberating the monetary policy stance, members referred to the analyses and communication from the June monetary policy meeting. The Committee’s assessment of the inflation outlook then implied that it would likely be necessary to raise the policy rate at one of the forthcoming monetary policy meetings.
Members agreed that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon. The Committee placed emphasis on the fact that inflation has remained above target for several years. High inflation over time can lead households and firms to begin planning for greater inflation persistence. Inflation may then become stickier and harder to bring down. At the same time, the Committee placed emphasis on avoiding a stance that could restrict the economy more than needed.
Since the monetary policy meeting in June, inflation has slowed and been lower than projected. The Committee gave attention to the fact that inflation is still too high and that the underlying drivers of inflation appear to be little changed since June. Members highlighted that it is too early to conclude that the inflation outlook has changed materially.
Members agreed to keep the policy rate unchanged at this meeting.
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Committee members in attendance: Ida Wolden Bache, Pål Longva, Øystein Børsum, Hilde C. Bjørnland and Steinar Holden
1) The summary does not specify the number of members who express a particular view. Words such as “some”, “a few” and “others” may refer to one or more members.
Countercyclical capital buffer
Countercyclical capital buffer rate unchanged at 2.5%
At its meeting on 12 August 2026, Norges Bank’s Monetary Policy and Financial Stability Committee decided to keep the countercyclical capital buffer rate unchanged at 2.5%.
About the countercyclical capital buffer
The countercyclical capital buffer is intended to strengthen banks’ solvency and mitigate the risk that banks amplify an economic downturn.
The countercyclical capital buffer rate is intended, in principle, to range between 0 and 2.5%. Norges Bank will normally set the buffer rate in the upper part of this range. If a downturn will or could cause a marked reduction in credit supply, the countercyclical capital buffer rate should be lowered. In the event of particularly high cyclical vulnerabilities, the countercyclical capital buffer rate may be set above 2.5%. If cyclical vulnerabilities recede significantly over time and the financial stability outlook is good, the buffer rate may be reduced. Norges Bank sets the countercyclical capital buffer rate each quarter.
The international situation is marked by uncertainty
Geopolitical tension and ongoing military conflicts continue to create uncertainty about the outlook for the global economy and developments in financial markets. In a global, interconnected financial system, shocks may quickly impact the Norwegian financial system. Financial system vulnerabilities could amplify a downturn in the Norwegian economy and lead to higher bank losses.
Households and firms have ample access to credit
In Norges Bank's Survey of Bank Lending for 2026 Q2, banks reported a slight increase in household credit demand, while corporate demand remained broadly unchanged. Overall, banks reported broadly unchanged credit standards and expect approximately unchanged credit demand and credit standards in Q3. Credit premiums increased slightly for both financial and non-financial corporates following the outbreak of the conflict in the Middle East but have declined in recent months and are close to the average for the past ten years. Heightened uncertainty contributed to somewhat lower bond market activity last winter, but the market picked up again before summer. In Norges Bank’s overall assessment, households and firms have ample access to credit.
Household debt is rising at broadly the same pace as income
High and rapidly rising debt can amplify economic downturns and increase the risk of financial crises. In recent years, total household debt has risen less than income. Debt-to-income (DTI) ratios have declined broadly across households and most for those with the highest debt (see Financial Stability Report 2025 H2). If DTI ratios decline over time, the household sector will become less vulnerable to interest rate increases and loss of income. In recent quarters, the decline in DTI ratios has slowed, and debt is expected to increase broadly in pace with income ahead.
During the years following the pandemic, higher interest rates and high inflation tightened household finances. However, most households have been able to both service debt and cover normal living expenses with current earnings by a solid margin. Over the past two years, wage growth has outpaced inflation. This increases households’ purchasing power and improves their debt-servicing capacity, also when taking into account higher interest rates.
After rising since spring 2024, 12-month household credit growth has remained stable at around 4.7% so far in 2026. Household credit growth is still lower than in the pre-pandemic years. Non-interest-bearing credit card debt reached record levels through summer, while total consumer debt growth was at approximately the same level as in the corresponding period in 2025.
Credit growth is normally closely linked to housing market developments. House price inflation has slowed following a moderate period in autumn 2025. In July, seasonally adjusted house prices fell by 1.1%. Turnover in the secondary housing market remains high, while activity in the primary housing market remains low.
Stable developments for commercial real estate, but still challenging conditions for real estate developers
Banks' CRE exposures are high. Commercial property selling prices rose at the beginning of 2025 but have since remained flat. Little change is expected in these prices ahead (see Financial Stability Report 2026 H1). Office vacancy rates have edged up over the past twelve months but are still low for the most attractive premises. Few new projects will be completed in the coming years, which will help sustain rents, particularly in central Oslo.
Higher interest rates and low construction activity have weighed on profitability and debt‑servicing capacity among real estate developers in recent years, and the number of bankruptcies has increased. Somewhat higher bank losses are expected on exposures to this sector (see Financial Stability Report 2026 H1).
Resilient banks are important for financial stability
Norwegian banks are highly profitable and satisfy capital and liquidity requirements by a solid margin. Bank losses are low. The solvency stress test in Financial Stability Report 2026 H1 shows that banks can absorb large credit losses while maintaining lending capacity.
Norges Bank’s Monetary Policy and Financial Stability Committee considers the Norwegian financial system to be robust. The countercyclical capital buffer requirement strengthens financial system resilience.
The Committee unanimously decided to keep the countercyclical capital buffer rate unchanged at 2.5%.
Ida Wolden Bache
Pål Longva
Øystein Børsum
Hilde C. Bjørnland
Steinar Holden
12 August 2026