SPEECH  Higher policy rate will curb inflation Introductory statement by Governor Ida Wolden Bache at press conference following announcement of the policy rate and publication of Monetary Policy Report 3/22 Chart 1 Policy rate raised Norges Bank’s Monetary Policy and Financial Stability Committee decided to raise the policy rate from 1.75% to 2.25% at its meeting on 21 September. The policy rate will most likely be raised further in November. Norges Bank’s task is to keep inflation low and stable. The operational target is inflation of close to 2 percent over time. We are also mandated to help keep employment as high as possible and to promote economic stability over time. We are raising the policy rate with the aim of bringing down inflation. Price stability is important for the economy to function well. It reduces uncertainty and facilitates planning. Those with low incomes and small margins are normally the hardest hit when inflation suddenly surges. The main contribution monetary policy can make to promoting high employment over time is to ensure low and stable inflation. As long as there is confidence that inflation will remain low and stable, the costs of minor deviations from the target of 2 percent are fairly insubstantial. But if households and firms expect inflation to be elevated and high inflation is incorporated into price and wage setting, inflation may take root, and bringing it down again could prove difficult. Chart 2: Inflation is high Consumer price inflation is now rising rapidly both globally and in Norway.

Therefore, in my view, trust is where the future is – the financial adviser of the future will be a trusted adviser – one that customers can depend on for reliable, thoughtful and bespoke advice without hesitation. Confidence and trust in the industry has unfortunately been bruised in recent years. Instances of mis-selling and fraudulent practices have adversely affected the industry’s reputation. The rising occurrence of illegal financial schemes in recent times has further worsened the public’s perception towards individuals who call themselves “financial experts”. Most financial advisers have done the right thing, only a small minority has not. Yet, it is this minority that has been enough to trigger a tipping point of bad publicity for the profession. Under these circumstances, trust becomes the ultimate currency of trade. Trust entails adherence to high ethical standards, putting the interests of customers first and treating them fairly. It comes down to the profession having a genuine concern for customers’ long-term financial needs. As trusted advisers, your responsibilities extend beyond just advising customers on how to invest their money. Rather, it is about helping them achieving their financial goals, building their financial standing, and securing a promising future for them and their children. Indeed, this is in line with the philosophy of the Association of Financial Advisers. It is imperative that your actions reflect these values. Indeed, as Confucius reminds us, it is the deeds that will prove critical in building the long lasting, reliable relationships that will take this profession to greater heights.