What changed in the Norges Bank statement —
Norges Bank raised policy at 4.50%. The September meeting delivered the hike the August statement had left open, lifting the policy rate to 4.50% and signalling that rates will stay high for longer than previously forecast, with an explicit tilt toward further increases if inflation proves stubborn. The inflation and labour-market foundations for the move are mixed — core inflation below forecast and easing capacity pressures alongside above-target hea
Decision
- Decision: hike
- Policy rate: 4.50%
What changed
The September meeting delivered the hike the August statement had left open, lifting the policy rate to 4.50% and signalling that rates will stay high for longer than previously forecast, with an explicit tilt toward further increases if inflation proves stubborn. The inflation and labour-market foundations for the move are mixed — core inflation below forecast and easing capacity pressures alongside above-target headline inflation — so the next decision hinges on whether those disinflationary threads continue or the Committee has to act on its stated willingness to tighten again.
- Inflation — Little changed. The inflation assessment became more two-sided — headline CPI is running above projections while core CPI-ATE has undershot, a nuance absent from August — yet the Committee still stresses that inflation is markedly above target and warns of de-anchoring, so the tightening rationale is retained rather than softened.
- Labour Market — Little changed. Labour-market framing is broadly carried over: employment is still rising and unemployment little changed, with the report of fewer capacity constraints and labour shortages offset by capacity utilisation declining slightly less than projected in June.
- Rate Path — More hawkish. The August hold at 4.25% with an explicit but conditional hiking bias has been converted into action — a 25bp increase to 4.50% — backed by a revised path that stays elevated for longer than the June forecast and a stated readiness to raise rates again if warranted.
- Balance Sheet — Little changed. Neither set of key passages contains balance-sheet or asset-purchase content, so there is no shift to report on this axis.
Previous wording
The Monetary Policy and Financial Stability Committee has decided to keep the policy rate unchanged at 4.25 percent.
Slower inflation is welcome news, but inflation is still too high, and it is too early to conclude that the inflation outlook has changed materially. It may thus still become necessary to raise the policy rate.
In July, consumer price inflation was 3 percent. Excluding tax changes and energy products, inflation was 2.7 percent.
An important reason why inflation has remained elevated in recent years is that firms’ labour costs have risen substantially. The rapid wage growth behind us will likely continue to contribute to keeping inflation elevated ahead.
The conflict in the Middle East is creating uncertainty about the inflation outlook. Shipping traffic through the Strait of Hormuz remains limited, and oil price volatility has been substantial through summer.
Unemployment is currently neither especially high nor unusually low and has changed little since our previous meeting.
Inflation may then become stickier and harder to bring down. We judge that a restrictive monetary policy stance is still needed to bring inflation down to target within a reasonable time horizon.
The future path of the policy rate will depend on economic developments. Our mission stands firm, and we will set the policy rate so that inflation returns all the way back to the 2 percent target.
Current wording
At its meeting on 23 September, Norges Bank’s Monetary Policy and Financial Stability Committee judged that a somewhat tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon.
The Committee decided to raise the policy rate from 4.25% to 4.50%.
CPI inflation has been higher than projected, while underlying inflation measured by the CPI adjusted for tax changes and excluding energy products (CPI-ATE) has slowed and been lower than projected.
The Committee gave special attention to the fact that inflation is still markedly above target. Underlying inflation has been lower than projected, but the inflation outlook somewhat further ahead does not appear to have changed materially.
High inflation over time can lead households and firms to begin planning for persistently high inflation. Inflation may then become stickier and harder to bring down again.
Employment has risen further, while unemployment has shown little change in recent months. On the other hand, the share of Regional Network contacts reporting capacity constraints and labour shortages has fallen.
The Committee’s assessment of the outlook implies that it will likely be necessary to keep the policy rate elevated for a time. The Committee is prepared to raise the policy rate further if warranted by the inflation outlook.
If, for example, external price impulses prove stronger than currently assumed, a higher policy rate may be needed to return inflation to target within a reasonable time horizon. If the recent months’ inflation figures turn out to be the beginning of faster disinflation or the labour market proves weaker than projected, the policy rate may become lower than currently envisaged.
Official statement
Policy rate raised to 4.50%
At its meeting on 23 September, Norges Bank’s Monetary Policy and Financial Stability Committee judged that a somewhat tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon. The Committee decided to raise the policy rate from 4.25% to 4.50%.
Inflation has been above target for several years. Capacity utilisation in the Norwegian economy has drifted down and now appears to be slightly below a normal level. At the monetary policy meeting in June, the Committee judged that it would likely be necessary to raise the policy rate further at one of the forthcoming meetings. Since June, the Committee has noted the following:
CPI inflation has been higher than projected, while underlying inflation measured by the CPI adjusted for tax changes and excluding energy products (CPI-ATE) has slowed and been lower than projected. The conflict in the Middle East is still creating uncertainty about the inflation outlook, and since June, prices for oil and gas and various other commodities have risen. At the same time, a stronger krone will contribute to dampening imported goods inflation. Market interest rates have increased both internationally and in Norway. Wage growth will likely be lower this year than in 2025 and broadly as projected in June.
Mainland economic activity has increased largely as expected. Employment has risen further, while unemployment has shown little change in recent months. On the other hand, the share of Regional Network contacts reporting capacity constraints and labour shortages has fallen. Overall capacity utilisation in the Norwegian economy appears to be declining slightly less than projected in June.
The Committee gave special attention to the fact that inflation is still markedly above target. Underlying inflation has been lower than projected, but the inflation outlook somewhat further ahead does not appear to have changed materially. The rapid rise in business costs in recent years will likely contribute to keeping inflation elevated ahead. High inflation over time can lead households and firms to begin planning for persistently high inflation. Inflation may then become stickier and harder to bring down again. The Committee does not want to restrict the economy more than needed, but judges that a somewhat tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon.
The Committee’s assessment of the outlook implies that it will likely be necessary to keep the policy rate elevated for a time. The Committee is prepared to raise the policy rate further if warranted by the inflation outlook.
If the economic outlook changes, the monetary policy outlook will also change. The Committee will be particularly attentive to signs that inflation will remain elevated for longer than projected. If, for example, external price impulses prove stronger than currently assumed, a higher policy rate may be needed to return inflation to target within a reasonable time horizon. If the recent months’ inflation figures turn out to be the beginning of faster disinflation or the labour market proves weaker than projected, the policy rate may become lower than currently envisaged.
In the forecasts, the policy rate remains close to the current level for a period ahead before declining somewhat. The new policy rate forecast indicates that the policy rate will remain elevated somewhat longer than the June forecast. With the current policy rate path, inflation is projected to slow from next year and move down to 2% in 2029. The economy is expected to cool somewhat further, and registered unemployment is projected to edge up to slightly above pre-pandemic levels.
The Government laid down a new regulation on monetary policy on 18 September. In the new regulation, the monetary policy objectives and considerations are described with the same wording as in the previous regulation. The new regulation does not entail any changes to the conduct of monetary policy.
The next monetary policy decision will be published on 5 November.
Contact:
Press telephone: +47 22 31 60 60 Email: presse@norges-bank.no
More information
Rate decision September 2026
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