Norges Bank's Executive Board has decided to keep the key policy rate unchanged at 0.5 percent.

In Monetary Policy Report 4/17, which was published on 14 December 2017, the Executive Board's assessment was that there was a continued need for an expansionary monetary policy. Domestic capacity utilisation was assessed to be somewhat below a normal level, and inflation was expected to remain below 2.5 percent in the coming years. The Executive Board's assessment of the outlook and the balance of risks suggested that the key policy rate would remain at 0.5 percent in the period ahead.

At the Executive Board's meeting of 24 January, new information was assessed against the projections in the December Report.

The global upturn is continuing, and overall, growth prospects for Norway's trading partners appear to be better than assumed in December. As expected, global core inflation has changed little in recent months. Forward rates among trading partners have moved up somewhat. The Norwegian money market premium is broadly in line with assumptions.

There is little new information about growth in the Norwegian economy. Goods consumption in November was higher than expected, but the rise was related to particularly strong promotional activity. The method used for housing statistics has been revised. The new statistics indicate a somewhat less pronounced fall in house prices over the past twelve months than projected. Housing starts have been slightly lower than assumed. Oil prices have risen. Prices for delivery in the coming years have also increased slightly, but crude oil futures prices further out are little changed.

Labour market developments have been broadly in line with expectations. Registered unemployment was 2.5 percent in December, unchanged on the previous month. According to the Labour Force Survey (LFS), unemployment remained steady between September and October. Employment rose and the labour force grew.

The twelve-month rise in consumer prices adjusted for tax changes and excluding energy products (CPI-ATE) rose to 1.4 percent in December. The rise was approximately as projected. The krone exchange rate, as measured by the import-weighted exchange rate index (I-44), has appreciated and is close to the projection for 2018 Q1.

The Executive Board's assessment is that the upturn in the Norwegian economy appears to be continuing, broadly in line with the picture presented in the December Report. Inflation is low, but has moved up as expected. Overall, the outlook and the balance of risks for the Norwegian economy do not appear to have changed substantially since the December Report.

The Executive Board decided to keep the key policy rate unchanged at 0.5 percent. The decision was unanimous.