Norway Holds Policy Rate at 4.5% as October CPI Reaches 3.6%

Norges Bank, Norway’s central bank, held its policy rate at 4.5% on Nov. 4, leaving another increase possible, while October data released six days later showed headline inflation rising and a tax-adjusted measure easing.

The Monetary Policy and Financial Stability Committee unanimously kept the rate unchanged. At the time of its decision, September inflation stood at 3.4% for the consumer price index (CPI) and 3.0% for CPI adjusted for tax changes and excluding energy products (CPI-ATE). The October figures came after the decision.

Consumer prices rose 3.6% in the 12 months through October, compared with 3.4% through September. CPI-ATE was 2.7%, down from 3.0% in September. The bank’s inflation goal is about 2% over time.

Gov. Ida Wolden Bache said at a Nov. 5 press conference that rates may rise if needed. “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,” she said.

The rate took effect Nov. 6. Norges Bank last raised it from 4.25% in September, with that move taking effect Sept. 25. The September rate increase was the bank’s previous change. The committee prepared no new forecasts for its November meeting. The bank plans to announce its next rate decision and publish Monetary Policy Report 4/26 on Dec. 17.