profits tend to lead to stronger growth in wages. lower earnings prompt companies to cut costs. this may take the form of increased work effort, or possibly workforce reductions, in order to increase productivity. companies may also reduce growth in business fixed investment. since 1997, price inflation has been higher in norway than among our trading partners. the most important reason for higher price inflation in norway is that we have had a tight labour market for many years. this has also led to high growth in wages and labour costs. in the light of higher price and cost inflation in norway than in other countries, it has been appropriate to maintain higher interest rates in norway than in most comparable countries. norges bank increased the sight deposit rate - which is our key rate - by a total of 1½ percentage points last year. so far this year, the key rate has remained the relationship between wage growth and price inflation was also discussed in the annual address in february this year. unchanged. as a result, the difference between short - term rates in norway and other countries has increased. the economic outlook the bank last analysed the outlook for the norwegian economy in the june 2001 inflation report. price inflation is projected to fall to 2½ per cent by next year already. the risk picture is mixed. the norwegian economy is still characterised by high capacity utilisation. the labour market is tight. there is a risk that domestic pressures may gradually translate into a stronger price impetus than we have projected. the consumer price index has risen by 2. 7 per cent since july 2000. the consumer price index excluding the direct effects of changes in excise duties and energy prices ( cpixe ) has risen by 2. 6 per cent since july last year, as calculated by norges bank. statistics norway publishes a consumer price index excluding electricity prices and a consumer price index excluding energy prices. they have a broader definition of energy prices than we use in our calculations. statistics norway has not adjusted for the direct effects of excise duties in their indices, but projects that the combined effect of changes in excise duties in january and july will depress the year - on - year rise in the cpi by 0. 5 - 0. 6 percentage points in july. according to statistics norway, the cpi excluding energy prices and excise duties can then be estimated at 2. 2 - 2. 3 per cent. whereas the activity level and pressures in the norwegian economy are high, there is growing uncertainty about developments in the global economy. the norwegian

at the same time, we must be prepared for the possibility that an altered market structure and technological innovation may lead to new vulnerabilities and risks. this may necessitate further regulations. norges bank will consider measures if they are required. the aim must be the continued existence of a robust and efficient payment system. 1 / 5 bis central bankers'speeches the payment market is characterised by network effects and platform competition. global technology companies, such as facebook messenger, google, apple and samsung, are relevant providers of payment services. these companies are able to capitalise on their popularity among users. in the long term, this may adversely affect competition and efficiency, since it is difficult for other providers to challenge large networks. there is also a danger that the owners of popular technological platforms could exclude other payment service providers from offering services on their platforms. if this proves to be the case, this is a matter for the competition authorities. under psd2, also commercial undertakings can seek authorisation as payment initiation service providers. mobile phone apps can combine direct advertising, loyalty programmes, storage of receipts with actual payments. even so, banks will play a key role. banks will also be able to provide payment services to persons who do not hold an account with the bank. this may strengthen interbank competition for payment customers. new technology must be used for the good of society. in principle, it is up to the business sector and customers to find suitable methods of payment. at the same time, we must ensure the security of the payment system. new payment service providers will increase the dissemination of payment information. this may also increase the risk that payment information gets into the wrong hands. vulnerabilities related to accessing, processing and storing information may affect the public ’ s confidence in the payment system. it may ultimately be appropriate to implement new measures to ensure that this information is processed in a secure manner. fast payment solutions the general public increasingly expects to be able to transfer funds on any day of the week and outside traditional opening hours. they also expect that payees will be credited quickly. in the future, there will have to be a good reason not to credit payees immediately, rather than with a delay, as is the case currently. this means that the payment system must meet new requirements. in norway, there is a provisional instant payments solution, which an increasing number of banks are adopting. it is positive that the solution is becoming more widely used, but it has its draw