Hundreds of guests from Norwegian society are on Thursday evening at Norges Bank’s premises to hear the annual speech by central bank governor Ida Wolden Bache. The main theme of the speech is trust. After a long period of many and frequent interest rate hikes, the governor of the central bank is asking for confidence. And although she cannot promise anything, she goes relatively far in assuring one thing: – If things go as we now believe, there will probably be no need for further interest rate increases. At the same time, she emphasizes the importance of patience. – There will probably be a need to keep interest rates up for quite some time to come, she says. The next interest rate cut is not a topic in the annual report, and no interest rate forecast has been made since December. The assumption was then that the policy rate will be kept at the current level until the autumn. Thinks unemployment will increase Ida Wolden Bache is clear that she believes that in the long term there is no contradiction between low inflation and many people in work. The employee organization LO has been critical of interest rate increases since autumn 2021. They believe that Norges Bank is not concerned enough with keeping the wheels turning in the economy for the sake of jobs. Despite the interest rate increases, unemployment in Norway is still close to record lows. The guests will also have dinner – they will get cheese from Kongsgården Norges Bank invites hundreds of guests from Norwegian society to its annual speech and annual dinner every year. The guest list often attracts attention because it is read as an overview of which people are among the most powerful in Norway. Gjevest is to be placed at the same table as central bank governor Ida Wolden Bache. Here is the list of guests invited tonight. Guests can look forward to a generous buffet at the Town Hall. Cold dishes: Blinis with loin rum from the Gulf of Bothnia and organic Røros Rømme. Trout tartare from Sirdal with roe, cauliflower and flatbread. Hitra crab salad with organic cucumber peel, roe and dill. Deer tataki with apple compote and citrus mayonnaise. Crudités with hummus and yoghurt dip. Cured food Coppa di Prima from A. Idsøe. Incognito salami from Metervare. Volcano chorizo from Metervare. Selection of bread, jam, organic Røros butter, aioli and seaweed from Lofoten. Hot dishes: Duck breast from Holte Gård. Long-roasted Norwegian lamb with rosemary and red wine sauce. Saltimbocca of livèche chicken from Østfold with mozzarella and sage butter. Skrei from Finnmark with chopped almonds and nut butter. Vegan pumpkin porchetta with lentil ragu and carrot. Wasabi salmon from Western Norway with miso sauce. Hot side dish Herbal baked pearl potatoes from Nøtterøy. Baked root vegetables with organic honey and clementine. Broccoli couscous with soy. Butter-baked mini vegetables. Oster Nidelven blue from Gangstad Gårdsysteri. Dronningberget from Bygdøy royal estate. Kongeskogen from Bygdøy royal estate. Dessert: Lemon tartlet. Apple cake with whipped cream. Vegan veiled peasant girls on Norwegian apples. Orange and clementine roll with cocoa and powdered sugar. Valrhona chocolate cake with hazelnut. Selection of macaroons. Bache hits back against any criticism that the central bank has not had employment in mind to a large enough extent when they have set up interest rates time and time again. – If we had been concerned with getting price growth back to the target as quickly as possible, we would have raised the interest rate more. When we do not, it is precisely because we want to contribute to as many people as possible being in work. But a certain negative development is to be expected in the future. – We must be prepared for unemployment to increase somewhat. The forecast is that we will return to pre-pandemic levels. At the same time, the governor of the central bank points to what has been seen in other countries, where price inflation has fallen, without unemployment rising. Think the debt will be easier to bear It is not only private individuals with mortgages who have noticed the high interest rates. Sectors such as the construction industry have also struggled. – The fight against inflation costs. Many have had tighter finances. For some, it is more difficult to make ends meet. Policy rate in percent The policy rate is set eight times a year by Norges Bank. The policy interest rate governs the interest rates in the banks, and affects your housing costs. The aim of raising the interest rate is for the high prices to come down again. The forecast tells us how Norges Bank thinks interest rates will develop in the future. Read more about sources and reservations here. A higher policy rate means increased expenses if you have a mortgage But in the long term, everyone benefits from the interest rate increases, because it has contributed to lower price growth, Bache believes. – If we had not raised the interest rate, we would have risked that prices continued to rise rapidly. It would particularly affect those who had the least to go on before. We could also risk having to tighten even more later in order to get price inflation under control. In his speech, the governor of the central bank is optimistic that people will get better advice in the future. Lower price growth, combined with wages that eventually rise faster than prices, will improve purchasing power and make the debt easier to bear, believes Bache. After a period of many interest rate hikes, the governor of the central bank predicts better advice for most people in the future. Photo: Benjamin Danielsen / n645901 But she prepares us for the fact that climate challenges, war, energy prices and technological development can lead to a less stable economy in the future, compared to the decades we have behind us. – Will it be more difficult to be Norges Bank in the future? – Perhaps we will more often be faced with more demanding trade-offs of what we have seen in recent years.
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– We must be prepared for unemployment to increase – news Norway – Overview of news from various parts of the country
