Inflation in Norway Persists. Latest Decisions from Norges Bank Announced
Norges Bank has kept the interest rate unchanged. Following the decision, it remains at 4.25 percent. At the same time, the institution announced that a rate hike may occur at one of the upcoming meetings.
Norges Bank did not decide to raise interest rates, but indicated that an increase is likely in the future.
Fot. Adobe Stock, licencja standardowa (zdjęcie poglądowe)
The decision was announced by Governor Ida Wolden Bache during a press conference after the meeting on June 18, 2026. Norges Bank points out that inflation in Norway is still too high, and price pressures have turned out to be somewhat stronger than previously assumed. The target remains unchanged. The bank aims to keep core inflation close to 2 percent over time, as well as to support the highest possible employment and economic stability.
Rate Unchanged. A Signal Before the Next Decision
The Monetary Policy and Financial Stability Committee decided to keep the rate at 4.25 percent. This decision was made with inflation clearly above the target. Norges Bank states that the current situation requires caution, as price increases have persisted for several years. However, the bank does not want to restrict the economy more than necessary.
According to new projections, a slightly more restrictive monetary policy will be needed. Norges Bank assumes that the interest rate may be raised at one of the upcoming meetings. The rate path published after the June decision is slightly higher than in March. By the end of the year, it is expected to be even above 4.5 percent.
According to new projections, a slightly more restrictive monetary policy will be needed. Norges Bank assumes that the interest rate may be raised at one of the upcoming meetings. The rate path published after the June decision is slightly higher than in March. By the end of the year, it is expected to be even above 4.5 percent.
An interest rate hike in 2026 is almost certain, according to Norges Bank's statements.Photo: Adobe Stock, standard license
Inflation Remains High. Companies' Costs Under Pressure
Consumer inflation in May 2026 was 3.1 percent. Prices of domestically produced goods rose more slowly, but prices of imported goods have increased in recent months. Norges Bank notes that many goods and services are still becoming more expensive quickly. Even after excluding some prices, such as energy and rents, inflation remains elevated.
One of the reasons is labor costs. Wages have risen sharply in recent years, and this year wage growth is expected to fall to 4.5 percent. The bank expects further slowing of wage growth in 2027, although business and social partner expectations have slightly increased since March. An additional factor is the prices of raw materials, including aluminum and copper, which have risen following recent events in global markets.
One of the reasons is labor costs. Wages have risen sharply in recent years, and this year wage growth is expected to fall to 4.5 percent. The bank expects further slowing of wage growth in 2027, although business and social partner expectations have slightly increased since March. An additional factor is the prices of raw materials, including aluminum and copper, which have risen following recent events in global markets.
Norges Bank assumes that inflation will return to the 2 percent target in 2029. A higher rate is intended to cool the economy, and registered unemployment may rise slightly above pre-pandemic levels. The bank also notes that the further direction of decisions will depend on inflation, the krone exchange rate, and developments in energy markets.
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