Bache sees wages and service prices prolonging disinflation
Norges Bank Governor Ida Wolden Bache said wage growth, services pricing and inflation expectations are prolonging Norway's return to its 2 percent target. She spoke at BI Norwegian Business School in Oslo on October 8, 2026.
Export gains sustain wage pressure
Ida Wolden Bache, Governor of Norges Bank (Central Bank of Norway), said the global price shock after the pandemic raised both import costs and Norwegian export prices.
Higher export prices supported stronger wage growth, which is now sustaining inflation.
She also linked the slow return to target to the Monetary Policy and Financial Stability Committee's balance between reducing inflation and sustaining employment.
Bache said stronger monetary tightening would have reduced inflation faster, but presented the explanation as multifaceted.
Her annual autumn lecture identified three sources of persistence: wage growth following the global price shock, services pricing and inflation expectations.
Services rarely become cheaper
Price cuts are common for goods but rare for services, Bache said.
That rarity can itself prolong disinflation.
High inflation can also influence expectations of future price increases, which in turn can reinforce inflation persistence.
A chart covering the past decade showed consumer price index (CPI) inflation remaining above target.
Norges Bank's mandate is to stabilize CPI inflation close to 2 percent.
The Bank for International Settlements (BIS) published the lecture on October 13, 2026.
Persistence has several sources
Bache's account places the slow return to target partly within the committee's employment-inflation trade-off.
It also identifies wage pressure, services pricing and expectations as sources of persistence.
Faster disinflation, she said, would have required stronger monetary tightening.