supply chains make the euro 1 / 4 bis - central bankers'speeches area vulnerable to foreign shocks, with potential trade barriers posing threats to manufacturing and investment. turning to inflation, headline inflation increased further to 2. 3 % in november from 2. 0 % in october, according to eurostat's flash estimate. the increase in the last two months – following a deceleration in previous months – was driven mainly by a moderation in the fall in energy prices and an increase in food inflation. core inflation – excluding energy and food – remained unchanged at 2. 7 % in november and is expected to hover around current levels until early 2025. services inflation remains the biggest contributor to inflation and stood at 3. 9 % in november, driven in part by recent high wage growth. overall, growth in labour costs has been moderating in recent quarters – notwithstanding the volatility of negotiated wage growth over the summer – and is set to continue easing. domestic inflationary pressures are also receding as profits have been buffering still elevated labour cost developments. looking ahead, inflation is expected to temporarily increase in the fourth quarter of this year, as previous sharp falls in energy prices drop out of the annual rates, before declining to target in the course of next year. let me now turn to our monetary policy stance. in october the ecb lowered its key interest rates by 25 basis points, following the previous rate cuts in june and september. the information available at our october meeting confirmed that the disinflationary process was well on track. our deposit facility rate, the rate through which we steer the monetary policy stance, now stands at 3. 25 %. we will review our stance again next week, following our data - dependent and meetingby - meeting approach. we are therefore not pre - committing to a particular rate path. the new economic governance framework let me turn now to the second topic you have chosen for our hearing today – the eu's new economic governance framework. fiscal policy is essential to address the multiple challenges europe is currently facing, ranging from the green and digital transitions to economic security and defence. but for fiscal policy to be credible and powerful, it also needs to rest on strong foundations. the eu's new economic governance framework strikes a balance between ensuring medium - term fiscal sustainability and fostering strategic investments and growthenhancing reforms. if implemented effectively, it will provide three major benefits. first, it can help address the challenges related to elevated debt levels, which

same time, interest rates have fallen to historically low levels. this has made a high debt burden easier to bear. in forming our expectations, we often look in the rear - view mirror. as anyone knows who has driven a car, mirrors are important. but if you only look back in the mirror, you will land in the ditch. that is also the way it is with expectations. if we become overly concerned with past events, we may miss signals about what lies ahead. so the question we must ask is : is household debt in norway based on unrealistic expectations? will debt be reduced? how did we get here? debt takes various forms. an important distinction is made between public and private debt. norway ’ s public debt is low at present and its assets in the government pension fund global ( gpfg ) are substantial. the return on the fund is a source of large annual government 1 / 7 bis central bankers'speeches revenues. this year, transfers from the fund account for one sixth of central government spending. on the other hand, private debt is high, both from a historical perspective and relative to other countries. chart 1 : record - high private debt this chart shows private debt in norway relative to gdp all the way back to 1830, a period of nearly two centuries. we see that debt has multiplied. the average debt of households is more than twice their disposable income. this debt comprises mostly residential mortgages. for those under age 40, average debt is well over three times their income. how did we get here? over the past 150 years, something has happened to the norwegian national character. in ibsen ’ s a doll ’ s house, helmer says : “ there can be no freedom or beauty about a home life that depends on borrowing and debt. ” helmer was probably harsh, even for his time. even then it was fairly inconceivable for most people to finance a home purchase without taking out a substantial mortgage. today we have few scruples left, and we have never borrowed as much as we do now. the striking pattern in the chart applies to more countries than norway. this pattern is described in detail in the well - known book about financial crises by the american professors reinhart and rogoff, this time is different. 1 debt levels fluctuate substantially over time, but the cycle is very long. it may take several generations of debt accumulation before a sudden adjustment takes place – usually owing to some