“Economic activity is high in Norway, and unemployment is at a historically low level. Inflation has continued to edge higher and is markedly above our target of 2 percent. We are raising the policy rate to curb inflation”, says Governor Ida Wolden Bache.

Inflation has increased more than projected, and the labour market appears to be a little tighter than previously anticipated. These developments could suggest raising the policy rate by more than 0.25 percentage point at this meeting. On the other hand, there are signs that some areas of the economy are cooling down, and prospects for lower-than-expected freight and energy prices may curb inflation ahead. The policy rate has been raised markedly over a short period, and monetary policy is beginning to have a tightening effect on the economy. This may suggest a more gradual approach to policy rate setting.

The outlook is more uncertain than normal. The future policy rate path will depend on how the economy evolves.

A new set of forecasts for the economy was not prepared for the monetary policy meeting on 2 November.