Norges Bank kept its policy rate at 4.5% at a meeting on 4 November, the central bank said the following day. The rate was raised to that level in September.
Inflation remains too high, Governor Ida Wolden Bache said. She said it would likely be necessary to keep the policy rate elevated for a time, and that the bank was prepared to raise it if needed to bring inflation to target within a reasonable time horizon.
The bank said restrictive monetary policy was still needed. Inflation has been above target for several years, while capacity utilisation in the Norwegian economy has declined and appears slightly below normal.
In September, annual consumer price inflation was 3.4%. CPI-ATE, which adjusts for tax changes and excludes energy products, was 3.0%. Inflation in domestically produced goods and services remained elevated and was higher than the bank had projected in its September report. Overall, inflation had evolved broadly as expected.
The bank said conflicts in the Middle East continued to create substantial uncertainty about the inflation outlook. Oil spot prices had fallen, while futures prices had risen somewhat. Spot and futures prices for gas and electricity had also increased. Indicators of external price pressures on Norwegian imports had risen further, as expected.
The krone had appreciated and was stronger than the bank had assumed. Unemployment had changed little in recent months. Registered unemployment was slightly lower than projected, while preliminary figures showed employment had increased a little more than expected.
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