Norges Bank’s Monetary Policy and Financial Stability Committee held the policy rate at 4.5%, judging inflation still too high despite slightly below-normal capacity utilisation. The decision follows quarter-point increases in May and September from 4%. The overnight lending and reserve rates remain at 5.5% and 3.5%, respectively. September consumer price inflation was 3.4%, above the 2% target, while domestically produced goods and services inflation exceeded projections. The Committee expects past increases in business costs to keep inflation elevated. The economic outlook was little changed since September, with registered unemployment broadly stable and slightly lower than projected. The krone appreciated and was stronger than assumed. Middle East conflicts continued to create substantial uncertainty about inflation, while gas and electricity prices rose and oil spot prices fell. The Committee signalled that the policy rate would likely need to remain elevated for a time and said it was prepared to raise it if warranted by the inflation outlook, while seeking to avoid restraining the economy more than necessary.
Norges Bank Holds Policy Rate at 4.5%
Norges Bank held its policy rate at 4.5%, with September consumer price inflation at 3.4%, above the 2% target. Its Monetary Policy and Financial Stability Committee signalled that the rate would likely remain elevated for some time and could rise further if warranted by the inflation outlook.