s regional network contacts throughout the country report that business conditions are weakening. overall, they expect activity to fall in the coming period. at the same time, there are wide differences across industries. high investment in petroleum production is fuelling activity for companies providing goods and services to the petroleum sector. retail trade and construction activity is falling owing to the decline in consumption and low residential construction. unemployment has remained low as expected, but recruitment difficulties have eased. a looser labour market will curb wage and price inflation further out. slide : international inflation is on the way down international inflation is on the way down. most central banks have kept policy rates unchanged in recent months and according to the market's interpretation of future developments, central banks will start cutting rates in the course of spring 2024. import price inflation will slow as a result of weaker price impulses. at the same time, there are other forces that could keep inflation in norway elevated despite an easing of international price impulses. slide : wage growth is high labour costs have shown a substantial rise in recent years, and wage growth is projected to reach 5. 5 percent this year. manufacturing profitability is solid, and wage growth is set to be high next year too. the pay increases are not large compared with the rise in living costs. but businesses are facing rising costs, and we can now see that higher labour costs are increasingly driving price inflation. slide : the krone has depreciated the krone has depreciated considerably and is now markedly weaker than we projected in september. we do not have a policy target for the krone exchange rate, but the movement in the krone is of concern to us because a weaker krone means higher imported goods inflation. a weaker krone also helps improve manufacturing profitability. in today's situation, the krone depreciation could make it more challenging to bring down inflation. slide : policy rate will likely be kept on hold for some time the committee assesses that a tight monetary policy stance will likely be needed for some time ahead in order to return inflation to target within a reasonable time horizon. further out, when inflation falls back and economic conditions so warrant, the committee can start lowering the policy rate. the forecast indicates that the policy rate will continue to lie around 4. 5 % until autumn 2024 before gradually moving down. slide : inflation will recede and unemployment edge up with such a path for the policy rate, inflation is projected to slow and approach target in

data cannot be dismissed and are, on their face, concerning. other indicators have mostly suggested a slight improvement in the labour market this year, not an accelerating deterioration. the bank ’ s reading, which we have had for a while, is that the labour market has a degree of spare capacity, and that it will be a while before we see unemployment decline consistently. looking ahead, ideally, the non - mining part of the economy would see a further pick - up to grow a bit above trend for a while, having been below trend for a while up to recently. we may not be quite there yet, but we are i think slowly building a foundation for better performance. what can we do to help this? the main thing the reserve bank can do is run an accommodative monetary policy so as to lend support to demand in the non - mining areas of the economy. rates of interest are at very low levels, and have been steady there for over a year now. most observers expect they will be there for some time yet. the rate we actually set, the overnight rate, is as low as it has been on a consistent basis in my lifetime. rates of interest that matter more for most borrowers are similarly very low, and in fact have been declining slightly even though the reserve bank board has not changed the cash rate for bis central bankers ’ speeches over a year now. they are lower than in recent previous cycles, even though the economy today is nothing like as weak as it has been on most of those occasions. monetary policy doesn ’ t just work on the borrowers ; the savers or investors matter too ( and in fact there are more of them ). the low returns on offer on safe investments in australia, and the ultra - low returns on such assets internationally, are certainly having an effect by prompting investors to “ search for yield ”. not only are returns on financial instruments low, but yields on the existing stock of physical assets – houses, commercial property, infrastructure assets – are being bid down. some of that search is of course coming from offshore. that ’ s a big part of how accommodative monetary policy works : by prompting substitution towards higher - risk assets ; raising asset prices, which increases collateral values and makes credit extension more viable ; improving the cash flows of debtors ; and so on. all those things are quite normal parts of the so - called “ monetary transmission mechanism ”. in some ways that term is a misnomer