going forward, enterprises will probably adjust the workforce to lower output growth and reduce the use of overtime. after a long period of high housing investment and rising prices, activity in the housing market is now slowing. tighter credit conditions are amplifying the fall in house prices. even though there are variations across regions, the trend in house prices is the same – from a more moderate rise at the beginning 2007 to a clear decline at the beginning of 2008. norges bank ’ s lending survey for the third quarter shows that banks are tightening credit standards for households. banks announced further tightening ahead. owing to growing turmoil and liquidity shortages in financial markets, banks have raised their requirements with regard to collateral and borrowers ’ debt - servicing capacity. growth in household credit has slowed in recent months. house price developments affect building starts, which have decreased in the past year. the decline is sharpest for residential building starts. in october, enterprises in norges bank ’ s regional network indicated a very low level of housing starts in the period ahead. order reserves for commercial buildings and holiday homes are high, however. commercial construction is largely financed by loans, and may therefore be affected by changes in interest rate and credit conditions. enterprises in norges bank ’ s regional network report that commercial building starts have declined in recent months. household saving has picked up. household income accounts show that the savings ratio excluding share dividends has risen, but is still very low and negative. household borrowing requirements have also decreased somewhat. ( household net lending has picked up slightly. ) the financial market crisis has led to higher borrowing costs for banks and has kept bank lending rates at a higher level than developments in the key rate would imply. households probably need to build up financial buffers and reduce debt, which will in turn weigh down on growth in private consumption ahead. growth in spending on goods stalled last autumn. there has been a considerable drop in car sales in particular. norges bank ’ s regional network also reports a decline in demand for goods related to moving home, such as white and brown goods and refurbishing equipment. growth in consumption is expected to be very low for a period ahead, but growth in private consumption may pick up again towards the end of next year. growth in mainland investment has been strong in recent years, but is now moderating. according to the national accounts, corporate investment was still on the rise in the first half of the year, but there was a considerable decline in housing investment. falling housing

while the life insurance industry's capitalization remains strong, the use of reinsurance merits continued monitoring. with that said, let me turn to monetary policy. considerations for monetary policy so what factors will i consider in the coming weeks as i contemplate the appropriate stance of monetary policy going forward? over the next few weeks, we will receive a considerable amount of data on economic activity for april and may, including the employment report for may and a report on may cpi inflation. monetary policy should be forward - looking. it should be conducted so that longer - term inflation expectations are well anchored around our inflation target of 2 percent. monetary policy should also be data dependent to allow for continuous learning about the underlying structure of the economy as new data arrive. these principles of monetary policymaking are always valuable, especially so when the level of uncertainty is high, as it is now. i am guided by the dual mandate assigned to the federal reserve by the u. s. congress : price stability and maximum employment. on the one hand, inflation is too high, and we have not yet made sufficient progress on reducing it. on the other hand, gdp has slowed considerably this year, and even though the effect has been muted in the labor market so far, demand clearly has begun to feel the effects of interest rates that are 5 percentage points higher than they were a little over a year ago. history shows that monetary policy works with long and variable lags, and that a year is not a long enough period for demand to feel the full effect of higher interest rates. another factor weighing on my thinking is the uncertainty about tighter lending standards that i mentioned earlier. i intend to consider all these factors in the coming weeks as i contemplate the appropriate stance of monetary policy going forward. thank you. 3 / 3 bis - central bankers'speeches