Rate decision September 2026
At its meeting on 23 September 2026, the Committee decided to raise the policy rate from 4.25% to 4.50%.
Rate decision - press release
Policy rate raised to 4.50%
At its meeting on 23 September, Norges Bank’s Monetary Policy and Financial Stability Committee judged that a somewhat tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon. The Committee decided to raise the policy rate from 4.25% to 4.50%.
“Inflation has been above target for several years. By raising the policy rate, we are helping to reduce inflation. It will likely be necessary to keep the policy rate elevated for a time, and the Committee is prepared to raise the policy rate further if needed to bring inflation down to the 2% target within a reasonable time horizon”, says Governor Ida Wolden Bache.
“At its monetary policy meeting in June, the Committee judged that it would likely be necessary to raise the policy rate at one of the forthcoming meetings. Over the summer, underlying inflation moderated and was lower than expected. But the inflation outlook somewhat further ahead does not appear to have changed materially”, says Governor Ida Wolden Bache.
Inflation has been above target for several years. Capacity utilisation in the Norwegian economy has drifted down and now appears to be slightly below a normal level. At the monetary policy meeting in June, the Committee judged that it would likely be necessary to raise the policy rate further at one of the forthcoming meetings. Since June, the Committee has noted the following:
- CPI inflation has been higher than projected, while underlying inflation measured by the CPI adjusted for tax changes and excluding energy products (CPI-ATE) has slowed and been lower than projected. The conflict in the Middle East is still creating uncertainty about the inflation outlook, and since June, prices for oil and gas and various other commodities have risen. At the same time, a stronger krone will contribute to dampening imported goods inflation. Market interest rates have increased both internationally and in Norway. Wage growth will likely be lower this year than in 2025 and broadly as projected in June.
- Mainland economic activity has increased largely as expected. Employment has risen further, while unemployment has shown little change in recent months. On the other hand, the share of Regional Network contacts reporting capacity constraints and labour shortages has fallen. Overall capacity utilisation in the Norwegian economy appears to be declining slightly less than projected in June.
The Committee gave special attention to the fact that inflation is still markedly above target. Underlying inflation has been lower than projected, but the inflation outlook somewhat further ahead does not appear to have changed materially. The rapid rise in business costs in recent years will likely 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 does not want to restrict the economy more than needed, but judges that a somewhat tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon.
The Committee’s 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 further if warranted by the inflation outlook.
If the economic outlook changes, the monetary policy outlook will also change. The Committee will be particularly attentive to signs that inflation will remain elevated for longer than projected. If, for example, external price impulses prove stronger than currently assumed, a higher policy rate may be needed to return inflation to target within a reasonable time horizon. If the recent months’ inflation figures turn out to be the beginning of faster disinflation or the labour market proves weaker than projected, the policy rate may become lower than currently envisaged.
In the forecasts, the policy rate remains close to the current level for a period ahead before declining somewhat. The new policy rate forecast indicates that the policy rate will remain elevated somewhat longer than the June forecast. With the current policy rate path, inflation is projected to slow from next year and move down to 2% in 2029. The economy is expected to cool somewhat further, and registered unemployment is projected to edge up to slightly above pre-pandemic levels.
The Government laid down a new regulation on monetary policy on 18 September. In the new regulation, the monetary policy objectives and considerations are described with the same wording as in the previous regulation. The new regulation does not entail any changes to the conduct of monetary policy.
The next monetary policy decision will be published on 5 November.
Rate effective from 25 September 2026:
- Policy rate: 4.50%
- Overnight lending rate: 5.50%
- Reserve rate: 3.50%
Contact:
Press telephone: +47 21 49 09 30
Email: presse@norges-bank.no
Press conferanse - video
The press conference in connection with the policy rate decision on 24 September 2026 will start at 10.30 am (In Norwegian).
Press conference - Introductory statement by Governor Ida Wolden Bache
We are raising the policy rate to dampen inflation
Introductory statement by Governor Ida Wolden Bache at the press conference following the announcement of the policy rate on 24 September 2026.
Chart: Policy rate raised to 4.5 percent
The Monetary Policy and Financial Stability Committee has decided to raise the policy rate by 0.25 percentage point to 4.5 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.
Chart: Inflation has been above target for several years
Inflation has been above target for several years. By raising the policy rate, we are helping to reduce inflation. It will likely be necessary to keep the policy rate elevated for a time, and the Committee is prepared to raise the policy rate further if needed to bring inflation down to target within a reasonable time horizon.
Let me say a bit more about the background for the decision and the Committee’s assessments.
Figures released earlier this month show consumer price inflation of 3.3 percent. Adjusted for tax changes and excluding energy products, inflation was 3.0 percent.
High inflation over time can make inflation stickier and harder to bring down again. In June, when we last presented projections, the Committee judged that it would likely be necessary to raise the policy rate at one of the forthcoming meetings. Over the summer, underlying inflation moderated and was lower than expected. But the inflation outlook somewhat further ahead does not appear to have changed materially.
Chart: Oil and gas prices have risen
The sharp rise in firms’ labour costs in recent years will contribute to keeping inflation elevated ahead. At the same time, the conflict in the Middle East is still creating uncertainty about the inflation outlook, and since June, prices for oil and gas and various other commodities have risen. Higher energy and commodity prices will result in higher costs for many domestic firms and higher prices for imported consumer goods. On the other hand, the krone has appreciated so far this year and is now stronger than assumed in the June projections. A stronger krone will in isolation pull down inflation.
Chart: Monetary policy tightening expected abroad
Higher energy and commodity prices are also pushing up inflation internationally, and market rates have increased considerably since June. In recent weeks, US and euro area policy rates were raised, and more rate hikes are expected in the US, the euro area and various other countries. Long-term interest rates have also increased. Higher interest rates abroad pull in the direction of higher interest rates also in Norway, among other things, through the effect on the krone exchange rate.
Chart: Firms report that it has become easier to recruit labour
When we set the policy rate, we also give weight to employment. We do not want to restrict the economy more than needed. In recent years, the Norwegian economy has gradually cooled and our Regional Network contacts report that it has become easier to recruit labour. Nevertheless, unemployment has shown little change over the past year. In August, 2.1 percent of the labour force was registered as fully unemployed, in line with our projection.
Chart: An elevated policy rate likely necessary for a time
In the policy rate forecast presented today, the policy rate remains close to the current level for a period ahead before declining somewhat. The forecast indicates that the policy rate will remain elevated somewhat longer than indicated by the June forecast.
Chart: Inflation down to target without a marked increase in unemployment
Inflation is projected to slow from next year and move down to 2 percent in 2029. The economy is expected to cool somewhat further, and registered unemployment is projected to edge up to slightly above pre-pandemic levels.
Wage growth is expected to be lower this year than in 2025 and to slow further in the years ahead. With lower inflation, household purchasing power is still expected to continue to strengthen, also when factoring in interest expenses.
The economic outlook is uncertain and hence also interest rate developments. In any case, we will set the policy rate with the aim of returning inflation to target.
The introduction was published when the press conference started at 10.30 am.
Monetary Policy Report including data
Monetary Policy Report 3/2026
Data in boxes
Summary of the Committee’s deliberations
Monetary policy decision, 23 September 2026
At its meeting on 23 September 2026, Norges Bank’s Monetary Policy and Financial Stability Committee decided to raise the policy rate to 4.5%. This is a summary of the deliberations and assessments at the meetings leading to the policy rate decision.1 The analyses in Monetary Policy Report 3/26 summarise the basis for the assessments. The analyses in the Report are based on information up to 18 September. The monetary policy decision and the assessments are based on information up to the Committee’s meeting on 23 September.
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 low, and oil exports have recently declined due to new military attacks in the Red Sea. Oil spot and futures prices in the coming year are higher than in June, while futures prices are little changed further out and indicate lower oil prices ahead. Prices for refined oil products and European gas have also risen since June. Summer droughts in Europe and an unusually severe El Niño have likely pushed up futures prices for various agricultural products. The Committee noted that overall external price impulses appear to be somewhat stronger than assumed in the June Report.
In recent weeks, higher energy prices have lifted short-term inflation expectations in Europe and the US. Long-term inflation expectations are little changed.
Growth in economic activity among Norway's main trading partners has been slightly stronger than projected in June, while the growth outlook for the coming years appears to be little changed since June.
The Committee noted that market-implied policy rate expectations abroad have risen markedly since June. Both the Federal Reserve and the European Central Bank recently raised their policy rates, and the market has priced in further rate increases ahead also by other central banks. Long-term government bond yields have also increased in many countries. Members discussed to what extent the increase in market rates abroad could imply a higher long-term neutral interest rate in Norway.
The market is pricing in a further rise in the policy rate in Norway in the course of 2026. Policy rate expectations have increased further out, but somewhat less than abroad, and are higher than the June policy rate forecast. The krone weakened somewhat at the end of June but has since strengthened. Measured by the import-weighted exchange rate index (I-44), the krone is now stronger than projected in the June Report.
Activity in the Norwegian economy and the labour market
The Committee noted that labour market developments have been slightly stronger than projected in the June Report. Employment has risen further and been slightly higher than assumed. Registered unemployment has remained stable through summer and was 2.1 percent in August, in line with the projection. As measured by the Labour Force Survey (LFS), unemployment has fallen slightly since the June Report but is still higher than pre-pandemic levels.
Mainland economic activity has continued to rise broadly as expected, and Regional Network contacts expect steady growth through autumn. The Committee noted that the national accounts and the Regional Network provide slightly different pictures of developments in household consumption. According to the national accounts, consumption fell in the first half of this year and has been weaker than projected, while Regional Network contacts in both retail trade and services report solid household demand. The Committee noted that the projections assume that consumption will pick up again in autumn. Housing investment has been slightly higher than expected, but figures for new home sales and housing starts point to continued low construction activity ahead.
In the Committee's discussion, members remarked that indicators of capacity utilisation in the economy do not provide a fully coherent picture of the degree of slack in the Norwegian economy. On the one hand, the share of Regional Network contacts reporting capacity constraints and the share reporting labour shortages have gradually fallen over the course of this year and are below their historical averages. On the other hand, registered unemployment has remained stable at just over 2 percent since spring 2025. Overall, new information indicates that capacity utilisation is likely just below a normal level, but it appears to be declining slightly less than projected in June. Some members gave weight to the fact that the Labour Force Survey could indicate greater economic slack.
Inflation
The Committee gave special attention to the fact that underlying inflation has declined and been lower than projected in June. The 12-month rise in the consumer price index adjusted for tax changes and excluding energy products (CPI-ATE) was 3.0 percent in August. Higher energy prices pushed up the overall consumer price index (CPI) to 3.3 percent, which was higher than projected. The Committee noted that the average of underlying inflation indicators was unchanged in August and stood a little higher than CPI-ATE inflation.
Imported price inflation slowed in summer after rising markedly through spring. In August, imported goods inflation was 1.6 percent and considerably lower than expected. Looking ahead, a stronger krone will likely dampen imported price inflation, while stronger external price impulses will restrain the decline. Domestic price inflation has remained elevated, and the sharp rise in firms’ labour costs over the past years is expected to keep it elevated also in the period ahead. Wage growth will likely be lower this year than in 2025, and quarterly wage statistics indicate that wage growth will likely be a littler lower this year than projected earlier. The Committee noted that the rise in house rents in the CPI slowed a little in summer, but that it is still expected to contribute to keeping domestic price inflation elevated ahead.
The Committee was concerned with the uncertainty associated with the inflation outlook. The Committee noted that the analyses indicate that underlying inflation will be lower over the next year, while the forces driving inflation somewhat further out have not changed materially since June. Some members were of the view that lower-than-expected underlying inflation through summer may, in isolation, suggest that inflation pressures have eased and that inflation could also become lower somewhat further out than currently implied by the analyses. Others pointed to the fact that the inflation expectations derived from Norges Bank’s Expectations Survey show no signs of decreasing, which could contribute to keeping inflation elevated for longer.
Monetary policy stance
In June, the Committee judged that it would likely be necessary to raise the policy rate at one of the forthcoming meetings, and the policy rate forecast was just above 4.5 percent at the end of the year. With a policy rate in line with the forecast, inflation was projected to slow from 2027 and move down to 2.0 percent in 2029, and unemployment was expected to edge somewhat higher to slightly above pre-pandemic levels.
In considering the monetary policy trade-offs, the Committee placed emphasis on the fact that inflation has remained above target for several years. In such a situation, it will be appropriate for monetary policy to react more forcefully to signs of increased inflation pressures than in a situation where inflation is close to target. High inflation over time can make inflation stickier and harder to bring down again. At the same time, members placed emphasis on avoiding a stance that could restrict the economy more than needed. Members agreed that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon.
Some members gave weight to the fact that underlying inflation has slowed somewhat and that capacity utilisation appears to be below a normal level. They were of the view that the risk of inflation becoming entrenched at an excessive level appeared to have eased somewhat over summer and that it could therefore be appropriate to await further information and keep the policy rate unchanged to avoid restraining the economy more than needed. Other members gave greater weight to the fact that inflation remains too high and expressed concerns that the monetary stance is not sufficiently restrictive to bring down inflation. They emphasised that unemployment has shown little change in recent months and that the driving forces still indicate that inflation will continue to run above target over the next years, and were of the view that this warranted an increase in the policy rate at this meeting.
Following thorough discussions, all members agreed to support the decision to raise the policy rate by 0.25 percentage point to 4.5 percent. The Committee’s 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 further if warranted by the inflation outlook.
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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.