“The moderate recovery in the Norwegian economy is continuing, and inflation has moved broadly in line with projections. However, the turmoil in global financial markets is creating uncertainty with regard to economic developments. This suggests that the interest rate should be kept unchanged for a period and that the further increase will occur later than previously envisaged”, says Deputy Governor Jan F. Qvigstad.

“The outlook for Europe is uncertain. Many countries are compelled to implement substantial fiscal tightening. This will dampen economic activity and may have an impact on other countries, both within and outside Europe. The projections in Monetary Policy Report 2/10, presented today, are based on the assumption that the turmoil in financial markets will gradually pass. Interest rates abroad are nonetheless expected to remain low for a fairly long period”, says Qvigstad.

The Executive Board’s strategy is that the key policy rate should be in the interval 1½–2½ per cent in the period to the publication of the next Monetary Policy Report on 27 October unless the Norwegian economy is exposed to new major shocks.

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

• Charts and background material