pressures in the economy, but also keeps an eye on other indicators. the 12 - month rise in the cpiate adjusted for the effects of lower maximum day - care rates is estimated at 1. 0 per cent in april. however, the cpi - ate not only strips out temporary effects of changes in tax changes and fluctuations in energy prices, but also trend changes in these variables. thus, this indicator is not a perfect measure of underlying inflation. in the last 10 - 20 years, where energy prices have risen at a faster pace than other consumer prices and the tax level has increased somewhat, the cpi - ate has tended to underestimate underlying inflation. this is illustrated in the chart, which shows the difference between the year - on - year rise in the cpi and the cpi - ate over a moving 10 - year average. since 1997, the difference has been about 0. 35 percentage point. however, even when taking into account trend increases in energy prices, inflation is still moderate. the indicators that provide the best expression of underlying inflationary pressures in the economy may vary over time. driving forces ahead oil prices are of importance for the activity level in the norwegian economy and government revenues. in recent years, oil prices have risen sharply. high demand for oil, limited idle production capacity and uncertain production levels in many oil - producing countries have contributed to this. oil prices have risen to over usd 70 per barrel, partly as a result of the uncertain political situation in a number of producer countries. futures prices for brent blend are now also above usd 70 per barrel until autumn 2008. futures prices indicate that oil prices will remain around this level several years ahead. this is higher than the level assumed in the previous inflation report. statoil and hydro gas prices have also increased sharply in recent months. petroleum production is expected to increase gradually in the period to 2011, and decline thereafter. developments in the gas market will become increasingly important. in the next 10 years, gas production could rise to at least the same level as oil production, measured by energy content. high oil prices have led to a strong increase in activity on the norwegian continental shelf. many projects have been launched to increase recovery from fields in operation. a number of companies have revised up the long - term oil prices that are used as a basis for investment decisions, but they are still moderate compared with futures prices. further out in the projection period, developments in petroleum - related investment become highly uncertain. it is assumed that overall activity will decline somewhat

. in japan, growth appears to be solid. in the euro area, confidence indicators point to optimism in the business sector. there is a broad - based expansion in the swedish economy, while some indicators in the uk have shown weak developments. the central banks in canada and switzerland have raised their key rates by 0. 25 percentage point since mid - march, while the federal reserve has raised its key rate by 0. 5 percentage point. market expectations concerning key rates in other countries have risen slightly. for the coming year, market pricing indicates that key rates will be increased in the euro area, the uk, sweden, switzerland, the us, canada, japan and australia. in norway, the key rate was last raised by 0. 25 percentage point to 2. 5 per cent at the monetary policy meeting on 16 march this year. financial markets still expect a gradual increase in the sight deposit rate ahead. in line with developments in global markets, the rise in norwegian long - term interest rates has gathered pace. markets have factored in that the key rate will be lower in norway than in the us and the uk at the end of 2009, but higher than in the euro area and sweden. monetary policy assessments since last summer, interest - rate setting has been oriented towards a gradual increase in the interest rate – in small, not too frequent steps – towards a more normal level. according to the assessment in the march inflation report, higher growth in the economy could, in isolation, warrant a faster rise in the key rate ahead. this would reduce the risk of bottlenecks in the economy, with rising cost inflation and continued debt build - up. on the other hand, the objective of bringing inflation up to the target of 2. 5 per cent and anchoring inflation expectations suggested in isolation that further interest rate increases should be delayed until there are clearer signs of a further rise in inflation. the trend in prices for consumer goods over the past two or three years is a result of favourable developments in the norwegian and global economy. the shift in trade towards low - cost countries has led to lower prices and higher real income. in addition, the changes in the world economy have provided norway with higher income because our terms of trade have improved. increased competition has curbed the rise in prices for a number of domestically produced goods and services. when inflation deviates substantially from the target for a period, the interest rate will be set with a view to gradually returning it to the target, so that we avoid substantial variations