Norges Bank kept its policy rate unchanged at 4.5% in a decision published on 5 November, after its Monetary Policy and Financial Stability Committee met on 4 November. The pause follows a rise at the September meeting.
"Inflation is too high," said Governor Ida Wolden Bache. "It will likely be necessary to keep the policy rate elevated for a time, and we are prepared to raise the policy rate if needed to bring inflation down to target within a reasonable time horizon".
PRICES STILL RUNNING HOT
Twelve-month CPI inflation was 3.4% in September and CPI-ATE, which adjusts for tax changes and excludes energy products, was 3.0%. Inflation in domestically produced goods and services remains elevated and has been higher than the central bank projected in its September report.
Registered unemployment has been a bit lower than projected, and preliminary figures show employment increasing a little more than expected. Capacity utilisation, however, has declined and appears to be slightly below a normal level.
The conflicts in the Middle East are still creating substantial uncertainty about the inflation outlook, the committee said. Oil spot prices have fallen while futures prices have increased somewhat, and the krone has appreciated and is stronger than assumed.
FROM SEPTEMBER'S RISE TO A PAUSE
At its meeting on 23 September the committee raised the policy rate from 4.25% to 4.50%. Its forecasts then showed the rate staying close to that level for a period before declining somewhat, with inflation projected to slow from next year and reach 2% in 2029.
DECEMBER BRINGS THE NEXT REPORT
No new forecasts were prepared for this meeting. Monetary Policy Report 4/26 will be published together with the policy rate decision on 17 December 2026, and the committee said it is prepared to raise the rate if warranted by the inflation outlook.
THE TGB VIEW
DNB Bank ranks 33rd among the Largest banks in Europe 2026 in the TGB Bank Rankings, with US$366.6bn of total assets and a 14.8% return on equity at the end of 2025. Its equity equals 8.0% of assets, a thicker cushion than Nordea's 5.0% or Danske Bank's 4.8%. The date to watch is 17 December 2026, when Norges Bank publishes Monetary Policy Report 4/26 with its next policy rate decision.
Bank news that matters, every weekday.
Follow The Global Banker on LinkedIn