Norges Bank Holds Policy Rate Unchanged at 4.25%

On 18 June 2026, Norges Bank’s Monetary Policy and Financial Stability Committee left the policy rate unchanged at 4.25 percent, saying inflation remains too high and new information indicates slightly stronger inflation pressures than previously anticipated, meaning a somewhat tighter monetary policy stance will likely be needed and, if developments turn out as currently envisaged, the rate will be raised at one of the forthcoming monetary policy meetings. Consumer price inflation was 3.1 percent against the central bank’s 2 percent target, imported goods inflation has edged higher in recent months, labour costs have risen substantially, and the policy rate forecast published with the decision is a little higher than in March and stands just above 4.5 percent at the end of the year, with inflation projected to return to target in 2029. Capacity utilisation appears close to a normal level but is drifting down, and Norges Bank said a higher policy rate would cool the economy further and raise registered unemployment to slightly above pre-pandemic levels. The krone appreciated over spring but has weakened again in recent weeks and is now broadly in line with the March assumptions, while external price impulses to Norwegian imports appear slightly stronger than expected. Norges Bank said the conflict in the Middle East and developments around the Strait of Hormuz continue to create substantial uncertainty for the outlook, though a recent United States-Iran memorandum of understa