“Consumer price inflation has been lower than expected and inflation is projected to remain at around 1½ per cent in the period to summer 2011. At the same time, growth in the Norwegian economy is continuing at a moderate pace”, says Governor Svein Gjedrem. The outlook for the world economy is still highly uncertain. The expected upward shift in key rates abroad has been deferred further ahead and long-term interest rates are very low. “An overall assessment suggests that the key policy rate be kept unchanged at this meeting”, says Gjedrem.

The analyses presented in the October Monetary Policy Report indicate that the key policy rate should be held at the current level over the coming quarters and then gradually raised towards a more normal level. Developments since June suggest that the interest rate should be raised somewhat later than projected in the June Report. 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 16 March 2011 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