Norges Bank holds rate at 4.5%, ready to hike if inflation persists

Norway's central bank, Norges Bank, kept its policy rate unchanged at 4.5% on Thursday, 5 November 2026, and said it is prepared to raise it again if needed to bring inflation down. Its rate-setting committee took the decision at a meeting on Wednesday, 4 November; the rate applies from 6 November. Governor Ida Wolden Bache said it will likely be necessary to keep the rate high for some time, after domestic prices rose faster than the bank had projected in September.

Norway's decision is part of a wider turn in rich-country central banks this autumn. Instead of cutting interest rates, several are holding or raising them because inflation has proved stubborn. On the same day, the Bank of England raised its Bank Rate by a quarter point to 4%. Norges Bank had already raised its rate in September and is now pausing to see whether that is enough.

The bank's main worry is that prices made at home, such as services and wages, are rising faster than expected. That kind of inflation is harder to bring down than a jump in energy prices, which can reverse quickly. By saying it is ready to raise rates again, the bank is signalling to businesses and workers that it will not let price rises settle at a higher level.

For borrowers in Norway, a policy rate of 4.5% keeps mortgage and business loan costs high. For savers, it means better returns on deposits. When several rich-country central banks keep rates high together, global borrowing costs stay elevated, which also shapes how much foreign money flows into emerging markets such as India.

Peepals calculation: With the policy rate at 4.5% and headline inflation at 3.4%, the "real" policy rate, the interest rate after inflation, is about 1.1 percentage points (4.5 − 3.4). Measured against the 3.0% inflation figure that excludes energy and tax changes, it is about 1.5 points (4.5 − 3.0). Norges Bank's rate is half a percentage point above the Bank of England's new 4% (4.5 − 4.0). The next decision, on 17 December, is six weeks after this one. Our calculation from the reported figures.

Short-term: Norwegian households and businesses keep paying high borrowing costs, and the bank's stated readiness to raise rates again keeps pressure on wage and price setters.

Long-term: If domestic inflation does not slow, the bank may raise rates again at a later meeting; if it slows, the rate could stay at 4.5% for an extended period, as some economists expect.

Who is affected: Norwegian borrowers and savers; businesses that trade with Norway; investors in Norwegian assets; and, more broadly, emerging-market economies such as India that are affected when rich-country interest rates stay high.

What to watch next: Norges Bank's next policy decision and Monetary Policy Report on 17 December 2026.

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