Norges Bank raised Norway’s policy rate by 25 basis points to 4.50% on Thursday, tightening monetary policy as inflation remains above target and energy-market disruption complicates the outlook. The central bank said the decision was unanimous and that a somewhat tighter stance was needed to return inflation to its 2% target within a reasonable period.
Underlying inflation moderated over the summer and came in below the bank’s earlier projections, but policymakers concluded that the medium-term inflation outlook had not changed materially.
Energy remains an important risk. Norges Bank said international conditions remain uncertain, while higher external price pressures could require additional tightening.
The bank’s latest projections keep the policy rate close to its current level for a period before gradually declining. Inflation is projected to slow beginning next year and return to 2% in 2029.
The decision reinforces a broader period of restrictive financial conditions as central banks confront inflation risks even as parts of the global economy cool.
Markets will now focus on inflation, energy prices, wage growth and the Norwegian krone to determine whether 4.50% represents the peak or whether Norges Bank follows through with another increase.
The next monetary-policy decision is scheduled for November 5.
