“In Norway, inflation is low and somewhat below the central bank’s target of 2.5 per cent.  Activity is increasing in the Norwegian economy, although there is still some margin of spare capacity. Interest rates in other countries are low. On balance, these factors suggest that the interest rate should be kept unchanged at 2 per cent”, says Deputy Governor Jan F. Qvigstad. 

Activity among some of Norway’s most important trading partners increased more than expected in the first half of the year and growth in Asia remains high. However, growth prospects in the US have been lowered. Slightly slower growth is also likely in the euro area ahead. Financial markets have stabilised somewhat after the turbulence before summer, but are still marked by uncertainty.

The low interest rate level in Norway has not triggered an increase in household debt growth so far and the rise in house prices is moderate. 

“The consideration of guarding against the risk of future financial imbalances that may disturb activity and inflation somewhat further ahead nonetheless suggests that the interest rate should be gradually brought closer to a more normal level”, says Qvigstad.

For further information, see The Executive Board’s monetary policy decision – background and general assessment.

• Charts and background material