Norges Bank Leaves Key Rate Steady as Expected

The central bank of Norway left its key policy interest rate steady at 4.5% at its November 2026 meeting, in line with market expectations, following a 25bps rate hike in the previous meeting in September. “Inflation is too high. 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”, says Governor Ida Wolden Bache. Policymakers also added that inflation remains markedly above target, and the rapid rise in business costs in recent years will likely contribute to keeping inflation elevated ahead. The Committee has not received information indicating that the outlook for the Norwegian economy has changed materially since its monetary policy meeting in September.

Norges Bank raised its policy rate by 25 bps to 4.5% in September 2026, in line with expectations, as policymakers stepped up efforts to contain inflation. While underlying inflation has been lower than expected this summer, the inflation outlook has not changed significantly. The US-Iran war continues to cloud the price outlook, with oil, gas and other raw-material prices rising. The bank noted that the sharp increase in business costs in recent years is likely to keep inflation elevated ahead, adding that sustained high inflation could lead firms and households to expect price pressures to persist, making it harder to reduce. Norges Bank therefore signaled that rates may need to remain high for some time and is prepared to tighten further if necessary to return inflation back to its 2% target within a reasonable timeframe. Meanwhile, economic activity grew broadly as expected and employment continued to rise, while capacity utilization fell slightly less than previously estimated.

The Norges Bank kept its policy rate steady at 4.25% in August, in line with market expectations, as inflation slowed more than anticipated over the summer. CPI inflation fell to 3% in July, while underlying inflation declined to 2.7%. However, both measures remain above the central bank’s 2% target, meaning policymakers believe it is too early to conclude that inflation is sustainably moving lower. The Bank therefore maintained its restrictive monetary policy stance and warned that another rate hike could still be necessary. Economic activity and labour-market conditions have developed broadly as expected, although housing prices fell sharply in July and construction remains weak. The krone has recovered somewhat after weakening earlier in the summer. The next major signal will come in September, when new economic forecasts are published and policymakers reassess the future path of interest rates.