to continue in 2010. house prices have risen. the new guidelines for prudent residential mortgage lending issued by finanstilsynet ( the financial supervisory authority of norway ) may curb household debt accumulation. over time, household borrowing may nevertheless increase considerably and saving may fall. the aim of guarding against the risk of future imbalances, which may disturb activity and inflation somewhat further ahead, suggests that the interest rate should be gradually brought closer to a more normal level. on the other hand, a marked interest rate increase in norway and a wider interest rate differential between norway and other countries may entail a risk of a considerably strongerthan - projected krone, resulting in inflation that is too low. this will make it difficult to bring inflation up to target within a reasonable time horizon. a strong krone may also lead to lower activity in exposed industries and thereby lower capacity utilisation in the norwegian economy. this suggests that the interest rate should not be raised too rapidly. monetary policy cannot fine - tune developments in the economy, but it can mitigate the most severe effects when the economy is exposed to shocks. overall, the outlook and the balance of risks suggest that the key rate should be gradually increased ahead, although somewhat later than we envisaged in october 2009. on 24 march, the executive board decided that the key policy rate should be in the interval 1½ – 2½ per cent in the period to the publication of the next report on 23 june 2010 unless the norwegian economy is exposed to new major shocks. the interest rate was kept unchanged at this meeting. this is based on the assessment that inflation and capacity utilisation may for a period be slightly lower than previously projected and that the interest rate should be increased somewhat later than expected in autumn 2009. thank you for your attention

2008. the fall in employment has been smaller than the decline in output might imply. productivity has fallen markedly. during the downturn, the number of hours worked has decreased somewhat more than the number employed. according to the bank ’ s regional network, reduced use of overtime hours, partial lay - offs and reduced working hours among part - timers have resulted in lower average working hours. moreover, increased sickness absence has made a contribution. output growth is expected to increase gradually through 2010, while growth in the number of hours worked shows a relatively small increase. as a result, employment will gradually become more consistent with the level of output, and productivity will rise further through 2010. compared with previous downturns, productivity growth remains weak. owing to a fall in labour force participation, labour force figures were lower at the end of 2009 than at the beginning of the year in spite of underlying growth in the working - age population. some people exit the labour force or choose not to enter the labour force when labour demand falls. unemployment continued to rise in the latter half of 2009, but at a far slower pace than earlier in the downturn. registered unemployment is projected to remain at about today ’ s level to the end of the year. the technical reporting committee on income settlements estimates annual wage growth at 4. 1 per cent in 2009. we expect wage growth to show a further decline in 2010. the uncertainty facing exposed industries is still considerable and wage growth among trading partners is low. a reserve of foreign labour and persons who have temporarily exited the labour force, and who may rapidly return, is probably pulling down wage growth. wage earners ’ share of income in the mainland economy is at a high level, after rising from 62 per cent in 2005 to 65 per cent in 2009. on the other hand, unemployment will probably level off at a lower level than in previous downturns, and in some sectors of the economy unemployment is still low. wage growth is expected to move up towards the end of the projection period. the operational target of monetary policy is low and stable inflation with annual consumer price inflation of close to 2. 5 per cent over time. over the past 10 years, inflation has on average been somewhat below, but close to 2. 5 per cent. from 2003 consumer price inflation was consistently somewhat lower than the target and monetary policy was then oriented towards bringing up inflation. in 2007 and 2008, inflation edged up and exceeded the target somewhat. the key policy rate was gradually raised to a