What changed in the Norges Bank statement —
Norges Bank held policy at 4.50%. The current statement maintains the dovish forward guidance of a rate cut later in 2025 while removing the prior hawkish signals that delayed and reduced the expected easing. The inflation assessment stays vigilant, but the risk balance softens, pointing to a cautious tilt toward easing at the next meeting.
Decision
- Decision: hold
- Policy rate: 4.50%
What changed
The current statement maintains the dovish forward guidance of a rate cut later in 2025 while removing the prior hawkish signals that delayed and reduced the expected easing. The inflation assessment stays vigilant, but the risk balance softens, pointing to a cautious tilt toward easing at the next meeting.
- Inflation — Little changed. Inflation assessment remains hawkish with no material shift: both documents warn against premature easing due to above-target inflation.
- Labour Market — Little changed. Labour market not mentioned in either document; no signal.
Previous wording
the policy rate will most likely be reduced in the course of 2025
Inflation has picked up and been markedly higher than expected.
If the policy rate is lowered prematurely, prices may continue to rise rapidly.
On the other hand, an overly tight monetary policy could restrict the economy more than needed to bring inflation down to target.
the Committee judges that the current stance is warranted for somewhat longer than previously signalled.
The policy rate forecast in this Report is consistent with a decline in the policy rate to 4% by the end of the year, followed by a gradual further decline over the next years. The forecast has been revised up somewhat from the previous Report.
If prospects suggest that wage and price inflation will remain elevated for longer than projected, a higher policy rate than currently envisaged may be required.
Current wording
the Committee’s current assessment of the outlook implies that the policy rate will most likely be reduced in the course of 2025.
Inflation is still above target. If the policy rate is lowered prematurely, prices may continue to rise rapidly
On the other hand, an overly tight monetary policy could restrict the economy more than needed to bring inflation down to target.
Trade barriers have, however, become more extensive, and there is uncertainty about future trade policies. The Committee gave special attention to the fact that this may pull the interest rate outlook in different directions.
The uncertainty surrounding the outlook is greater than normal, and the future path of the policy rate will depend on economic developments.
Official statement
Policy rate kept unchanged
Introductory statement by Deputy Governor Pål Longva at the press conference following the announcement of the policy rate on 8 May 2025.
Download presentation (pdf)
Chart 1: Policy rate kept unchanged at 4.5 percent
Norges Bank is tasked with keeping inflation low and stable. The operational target is inflation of close to 2 percent over time. We are also mandated to help keep employment as high as possible and to promote economic stability.
When inflation surged three years ago, we raised the policy rate sharply and rapidly. The policy rate has been held at 4.5 percent for more than a year. Inflation has fallen markedly from the peak but is still above target. Unemployment has edged up in recent years, albeit from a low level.
At yesterday’s monetary policy meeting, the Monetary Policy and Financial Stability Committee decided to keep the policy rate unchanged at 4.5 percent.
There is uncertainty about future economic developments, but the Committee’s current assessment of the outlook implies that the policy rate will most likely be reduced in the course of 2025.
We have not made new forecasts for this monetary policy meeting but have assessed new information about economic developments against the forecasts presented in March. I will now provide an account of these assessments, starting with international developments.
The global economy is marked by uncertainty about future trade policies. The US has raised tariffs on a range of goods, and some countries have responded with counter-measures. Trade barriers are now more extensive, and the global growth outlook appears to be weaker than assumed in the March Monetary Policy Report . While higher tariffs alone could push up inflation, lower global growth could dampen inflation.
Interest rate expectations have fallen internationally since March. Oil and gas prices and prices for a number of other commodities have fallen.
Global trade uncertainty has led to large movements in financial markets. Major equity indices fell sharply at the beginning of April but have since largely been reversed. Increased market stress and the fall in oil prices coincided with the krone weakening somewhat.
Tariffs have also risen for Norway. The US has imposed a tariff of 10 percent on many Norwegian goods and has announced an increase to 15 percent. The direct effect on growth in the Norwegian economy is likely limited, but global trade uncertainty could dampen activity.
Chart 2: Registered unemployment is little changed
So far, activity in the Norwegian economy has been broadly as expected. Activity in the primary housing market appears to have picked up a little recently but is still at a low level. House prices have been lower than projected. The employment rate is high, and employment is somewhat higher than expected. In recent months, registered unemployment has shown little change.
Chart 3: Inflation is still above target
Since the end of 2024, inflation in Norway has risen somewhat. In March, consumer price inflation fell to 2.6 percent. Inflation adjusted for tax changes and excluding energy products was stable at 3.4 percent. This was in line with our expectations. Overall inflation is primarily being driven by the rise in prices for food and services. The wage norm for manufacturing in 2025 is close to the Bank’s projection of overall annual wage growth. High growth in business costs is likely to stoke inflation ahead. Since the March Report , the krone has been weaker than expected. A weaker krone means higher prices for imported goods.
In summary, our assessment is that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon. If the policy rate is lowered prematurely, prices may continue to rise rapidly. On the other hand, an overly tight monetary policy could restrict the economy more than needed to bring inflation down to target.
Since March, developments in the Norwegian economy have been broadly as expected. Trade barriers have, however, become more extensive, and there is uncertainty about future trade policies. This may pull the interest rate outlook in different directions. On the one hand, the global growth outlook appears to be weaker, and oil prices have fallen. Norway’s main trading partners are now expected to make more rate cuts than previously. On the other hand, the krone has weakened somewhat and been weaker than assumed.
The uncertainty surrounding the outlook is greater than normal, and the future path of the policy rate will depend on economic developments . The Committee will have received more information ahead of its next monetary policy meeting in June when new forecasts will also be presented.
More information
Rate decision May 2025
Related
Background reading
Cadence's comparison is generated from the official documents. Read the methodology.
The Cadence Brief
The one number that moved central bank pricing — delivered each weekday morning.