“Based on Norges Bank’s current assessment, the key policy rate will be kept at the current level for some time ahead”, says Governor Øystein Olsen.

Advanced economies are likely facing an amplified and prolonged downturn. Financial markets are marked by turbulence and uncertainty. “Turbulence and weaker prospects abroad are also affecting the outlook for the Norwegian economy”, says Governor Olsen.

Inflation is low in Norway, but growth in the Norwegian economy remains robust. There is an unusually high level of uncertainty surrounding developments ahead. The analyses in the October 2011 Monetary Policy Report suggest that the key policy rate will increase again in a year’s time.

“If the turbulence abroad intensifies and the outlook for growth and inflation weakens further, the key policy rate may be reduced. If there are prospects for higher growth and inflation, the key rate may rise earlier”, says Governor Olsen.

The Executive Board decided at its meeting on 19 October that the key policy rate should be in the interval 1¾–2¾ per cent in the period to the publication of the next Report on 14 March 2012, unless the Norwegian economy is exposed to new major shocks.

For further information, see “The Executive Board’s assessment” in the October 2011 Monetary Policy Report.

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