In Monetary Policy Report 2/19, which was published on 20 June 2019, the Executive Board’s assessment was that capacity utilisation in the Norwegian economy was somewhat above a normal level. Underlying inflation was a little higher than the 2 percent inflation target. The policy rate was raised by 0.25 percentage point to 1.25 percent. The Executive Board’s assessment of the outlook and balance of risks suggested that the policy rate would most likely be increased further in the course of 2019.

The upturn in the Norwegian economy is continuing broadly as expected in June. Underlying inflation has been a little lower than projected. Deepening trade tensions and heightened uncertainty surrounding the UK’s relationship with the EU may weigh on growth abroad and in Norway. On the other hand, a weaker krone may contribute to higher inflation ahead.

“Overall, new information indicates that the outlook for the policy rate for the period ahead is little changed since the June Report. The global risk outlook entails greater uncertainty about policy rates going forward”, says Governor Øystein Olsen.