raised further in september. 3 / 4 bis - central bankers'speeches if the krone proves to be weaker than previously projected or pressures in the economy persist, a higher policy rate than signalled in june may be needed to bring down inflation. if there is a more pronounced slowdown in the norwegian economy or inflation declines more rapidly, the policy rate may be lower than we have envisaged. the economic outlook is uncertain. but there is no uncertainty about the objective. we will set the policy rate so that inflation stabilises at close to 2 percent. by doing so, we are helping to restore households'purchasing power and promote high employment and economic stability over time. 4 / 4 bis - central bankers'speeches

but the cost of not doing so could prove greater. 2 / 4 bis - central bankers'speeches in deciding the policy rate, my colleagues and i are concerned with balancing the risk of tightening too much and the risk of tightening too little. if we had raised the policy rate faster, we could have brought inflation down towards the target faster. but we also give weight to promoting the goal of maximum employment when we set the policy rate. we do not want to raise the policy rate more than required to tackle inflation. but if we do not tighten monetary policy sufficiently, there is a risk that prices will continue to rise rapidly and that households and businesses start planning for high inflation in their price and wage setting. if the policy rate is raised considerably less in norway than in other countries, the krone may depreciate markedly. and if inflation becomes entrenched, it may become necessary to tighten policy even more sharply, with the risk of a severe downturn that could leave many people without a job. that is something we want to avoid. the wage formation model in norway reduces the risk of wage price spirals. that means the policy rate can be raised to a lesser extent than would otherwise have been needed. but inflation will not come down to the target on its own. chart : developments broadly in line with projections let me say a bit more about the assessments we made at our monetary policy meeting this week. we did not prepare new forecasts for that monetary policy meeting, but we did assess new economic information against our june projections. economic growth among our trading partners slowed through spring. while overall inflation receded in many countries, underlying inflation has remained elevated. central banks have continued to raise policy rates through summer. energy prices have fallen in norway. excluding energy prices, inflation has remained high. unemployment has remained low. it is our assessment that overall developments have been broadly in line with expectations. this is why we are also sticking to the plan we set out in june, which was to raise the policy rate to 4 percent now. we know that many people are now wondering whether the current monetary policy tightening cycle is nearing the end. chart : policy rate will likely be raised again in september the answer is that we have come a long way, but we believe that a somewhat higher policy rate will be needed to bring down inflation towards the target within a reasonable horizon. the future policy rate path will depend on economic developments. if the economy evolves as currently anticipated, the policy rate will be