ate. other available measures of underlying inflation also suggest that inflation has moved up. while the year - on - year rise in the cpi - ate is now 2. 4 per cent, other measures of underlying inflation are above 3 per cent. recently, inflation has been somewhat higher than our projections from last year. inflation was broadly in line with expectations through 2007. in 2006, inflation was considerably lower than projected at the beginning of the year. a period of intensified competition seems to have curbed the rise in prices for domestically produced goods and services. now that inflation has picked up, it is also close to the 2006 projections. inflation was particularly low in the years following the turn of the millennium with the stream of ever - cheaper goods from asia, and solid productivity growth in norway that resulted in a subdued rise in prices for domestically produced goods and services. low inflation was addressed by lowering the interest rate. solid growth in output and demand for goods and services gradually led to prospects for higher inflation. the interest rate has gradually been raised again since summer 2005 to prevent inflation from becoming too high. during 2007, the key policy rate neared what we consider to be a normal level. the key policy rate was raised in seven increments from 3. 50 per cent to 5. 25 per cent. the interest rate was raised ahead of the curve before inflation approached 2. 5 per cent. growth in the norwegian economy has been high and higher than expected since 2003. growth recovered faster and has been stronger than in the 1980s and 1990s. growth was unusually high in 2007 for such an advanced phase of the upturn. annual growth in mainland gdp in the three - year period 2004 - 2006 averaged more than 4 per cent. in 2007, growth was just over 6 per cent. inflation remained low for a long period despite strong growth and increasing capacity utilisation. there are several reasons for this : first, labour has flowed into norway from other countries. the opening of the labour market to the new eu countries has provided us with access to a reserve of labour. initially, workers came to norway on short - term assignments. they produced in norway, but their consumption largely took place in their home country, with an attendant increase in the economy ’ s net production capacity. an increasing number of workers subsequently moved to norway and took up residence here, often accompanied by their families. this still increases production, although the higher number of foreign workers who want to settle in norway also puts added pressure on domestic resources. per capita

with low productivity growth, this means higher business costs. chart : the krone has depreciated moreover, the krone depreciated markedly in the period to summer last year. a weaker krone means higher import prices. the krone is now a little weaker than before the monetary policy meeting in september and a little weaker than expected. the depreciation has been particularly pronounced against the us dollar, which has appreciated against many currencies in recent weeks. the dollar appreciated further in the hours following the us election. chart : modest rise in unemployment since we started raising the policy rate, unemployment has edged up from a very low level. at the end of october, registered unemployment was 2. 1 percent, in line with our september projection. unemployment is still a little lower than in the period before the pandemic, and the number of job vacancy postings is high. chart : the policy rate will likely be held at today's level to the end of the year the committee judges that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon. the committee is concerned with the possibility that if the policy rate is lowered prematurely, inflation could remain above target for too long. on the other hand, an overly tight monetary policy could contract the economy more than needed. when we set the policy rate, we have to balance these trade - offs. the economic outlook is uncertain. the committee will have received more information about economic developments ahead of its next monetary policy meeting in december, when new policy rate forecasts will be presented. 2 / 2 bis - central bankers'speeches