Norges Bank raised its policy rate by 25 basis points to 4.5% in September 2026, in line with market expectations, as policymakers intensified efforts to curb inflation. Headline CPI inflation accelerated to 3.3% in August, its highest level in four months, while underlying inflation also rose to 3%.
The ongoing US–Iran war continues to cast uncertainty over the inflation outlook, driving up oil and gas prices and pushing higher the prices of several other raw materials. The central bank indicated that the policy rate will likely need to remain elevated for an extended period and reiterated that it stands ready to tighten policy further, if necessary, to return inflation to its 2% target within a reasonable time horizon.
At the same time, overall economic activity expanded broadly as expected, with employment continuing to rise and unemployment remaining largely unchanged in recent months. Capacity utilization, meanwhile, appears to have declined slightly less than previously estimated in June.
