Policy rate stays at 4.5 percent as inflation remains above target
Norges Bank's Monetary Policy and Financial Stability Committee kept the policy rate at 4.5 percent. Governor Ida Wolden Bache said rates must remain elevated for a time, with another increase possible if inflation warrants it.
Domestic prices resist disinflation
The November 4 decision follows September's increase to 4.5 percent.
September CPI inflation was 3.4 percent; CPI adjusted for tax changes and excluding energy was 3.0 percent.
Domestic goods and services inflation exceeded projections.
Capacity utilisation appears slightly below normal.
Middle East conflicts cloud the inflation outlook.
Oil spot prices fell but futures rose somewhat; gas and electricity spot and futures prices increased.
External price impulses to imports rose as projected, while the krone was stronger than assumed.
Labor Force Survey and registered unemployment data showed little change.
Registered unemployment was below projections; preliminary salaried employment rose more than anticipated.
Overall inflation broadly matched projections.
Business costs sustain price pressure
Inflation has exceeded target for several years.
The Committee said restrictive policy remains necessary, citing rapid business cost increases that it expects to sustain price pressure.
Prolonged high inflation risks making it harder to reduce, but the Committee wants to avoid excessive restraint.
It saw no material change in the outlook since September and prepared no new forecasts.
The rate path depends on economic developments; Monetary Policy Report 4/26 and the next rate decision are due on December 17, 2026.
A hold with conditions
Holding rates does not remove the possibility of further tightening: the Committee explicitly retains that option.
Its stated trade-off is persistent inflation against unnecessary economic restraint.
December brings new forecasts and more evidence for that judgment.
Source: Policy rate kept unchanged at 4.5 percent
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