Policy rate raised to 4.5 percent to curb inflation
Norges Bank has raised its policy rate to 4.5 percent to bring inflation back toward target. Governor Ida Wolden Bache presented the decision during the monetary policy assessment on September 24, 2026.
Anchoring expectations at 4.5 percent
Governor Ida Wolden Bache stated that the policy rate was raised to 4.5 percent because inflation has remained above target for several consecutive years.
Both headline consumer price index inflation and underlying inflation adjusted for tax changes and excluding energy products continue to exceed the central bank target.
Rising oil and European natural gas prices have added to price pressures, alongside expectations of tighter monetary policy abroad across the United States, the United Kingdom, the euro area, and Sweden.
Norges Bank forecasts that an elevated policy rate will remain necessary for an extended period to return inflation sustainably to target.
Recruitment pressures ease
Domestic economic conditions show signs of gradual normalization.
The share of Norwegian enterprises reporting labor shortages has declined, with businesses noting that recruiting workers has become easier compared with previous years.
The central bank projections in Monetary Policy Report 3/26 indicate that inflation will decline toward the target without triggering a marked rise in registered unemployment, balancing disinflation against labor market resilience.
A precarious soft landing
The rate increase demonstrates firm resolve against persistent above-target inflation.
Projecting price stability without higher unemployment relies on an unusually optimistic soft-landing scenario.
Prolonged restrictive rates will test households far more than the official forecast admits.