Executive Board meeting

Transcription

1 Executive Board meeting September 7 Growth forecasts Consensus Forecasts GDP. Percentage change on previous year 9 7 Forecasts August Forecasts September World North Western Japan America Europe 7 Asia excl. Japan Eastern Latin Europe America 9 7 Forecasts August Forecasts September World North Western Japan America Europe Asia excl. Japan Eastern Latin Europe America Source: Consensus Forecasts

2 New measures from central banks (since August) Central bank Fed ECB Date 7 August August September August September, and September Comment: The Fed lowers the discount rate temporarily from. to.7 per cent. Increases loan terms - up to days. Increase in securities that are accepted as collateral for loans. The Fed lowers the target for the federal funds rate by. percentage point to.7 per cent (there was a slight overweight of expectations for. percentage point in advance). Extraordinary -month provision of liquidity. ECB keeps interest rate unchanged (as expected by the majority in the market). Reserve requirements and fluctuation margins are increased several times. Bank of England September and 9 September 9 September BoE keeps Bank Rate unchanged (as expected by the majority in the market). BoE offers emergency funding to Northern Rock. BoE offers liquidity with a -month maturity. Increase in securities that are accepted as collateral for loans. House prices ) and housing starts in the US Seasonally adjusted. -month rise. ) January August 7 New dwellings - Existing - dwellings ) Median price for dwellings Housing starts - ) -month moving average Sources: Reuters (EcoWin) and

3 Equities Indices, November =. November September 7 Euro area Norway Emerging economies US Japan 9 Nov Jan 7 Mar 7 May 7 Jul 7 Sep 7 9 Source: Reuters (EcoWin) Credit premium on BBB-rated corporate bonds in the US and Europe and on the debt of emerging economies Percentage points. January September 7 Emerging economies US Europe Jan Jul Jan Jul Jan Jul Jan 7 Jul 7 Source: Reuters (EcoWin)

4 Price of hedging credit risk. -year CDS prices Basis points. January 7 September 7 European banks (Itraxx index) Bear Stearns Citigroup JP Morgan Chase DnB NOR Jan 7 Mar 7 May 7 Jul 7 Sep 7 Sources: Bloomberg, Reuters and Thomson Datastream Difference between money market rates and expected key rate ) -month maturity. Percentage points. April September 7.. Euro area Apr 7 May 7 Jun 7 Jul 7 Aug 7 Sep 7 ) The expected key rate is measured by Overnight Indexed Swap (OIS). ) Projections. The projections for the past months are based on a market bias towards an interest rate increase in September and December. Prior to this they are based on actual key rates. US UK Norway ) Sources: Reuters (EcoWin) and

5 Money markets -month LIBOR/NIBOR. Per cent. April September 7 UK US Euro area Norway Apr 7 May 7 Jun 7 Jul 7 Aug 7 Sep 7 Source: Reuters (EcoWin) 9 Key rates and forward rates August and September 7 US UK Norway Euro area September 7 After previous monetary policy meeting ( August 7) Jan Jan Jan 7 Jan Jan 9 Jan Sources: Reuters (EcoWin), Bloomberg and

6 . Key policy rate in baseline scenario and estimated forward rates ) Per cent. At September 7.. Baseline scenario MPR /7.... Market September 7 Market after previous monetary policy meeting ( August 7) Q Q Q 9 Q 9 Q Q Q. I) A credit risk premium and a technical difference of. percentage point have been deducted to make the forward rates comparable with the key policy rate. Sources: Reuters (EcoWin) and. Trading partners' forward rate curve -month nominal money market rates Per cent. At September 7. Baseline scenario MPR /7.. Market September 7 Market after previous monetary policy meeting ( August 7) 7 Q Q Q 9 Q 9 Q Q Q Sources: Reuters (EcoWin) and

7 -month interest rate differential and import-weighted exchange rate (I-) ) January December I- (left-hand scale) Average - September September 7 97 After previous monetary policy meeting Weighted interest rate differential ( August 7) (right-hand scale) 7 9 ) A rising curve denotes an appreciation of the krone. - Sources: Bloomberg, Reuters (EcoWin) and Inflation and interval for underlying inflation ) -month change. Per cent. January August 7 CPI Highest indicator Inflation target Lowest indicator - 7 ) Highest and lowest indicator of the CPI-ATE, a weighted median and the trimmed mean of the sub-indices in the CPI. - Sources: Statistics Norway and

8 Jul Jan Jul Jan Jul Jan Jul Jan 7 Jul 7 CPI-ATE ) Total and broken down into imported and domestically produced goods and services ). Projections from MPR /7 (broken line). -month change. Per cent Goods and services produced in Norway (.7) CPI-ATE Imported consumer goods (.) ) CPI adjusted for tax changes and excluding energy products. A further adjustment is made for estimated effect of reduced maximum day-care prices in. ) 's projections. Sources: Statistics Norway and Employment In s Labour market Unemployment Per cent. Seasonally adjusted QNA LFS unemployment Registered unemployed LFS ) ) The changes to the LFS have resulted in a break in the time series between and. Sources: Statistics Norway and Norwegian Labour and Welfare Organisation (NAV)

9 Investment intentions survey. Petroleum activities Estimated and actual investment. In billions of NOK May Aug Nov Feb May Aug Nov Feb Estimate made previous year Estimate made current year Final figures Source: Statistics Norway Investment intentions survey. Manufacturing Estimated and actual investment. In billions of NOK 7 May Aug Nov Feb May Aug Nov Feb Estimate made previous year Estimate made current year Final figures Source: Statistics Norway

10 Index of commodity consumption Volume. Seasonally adjusted. January July 7 7 Sources: Statistics Norway and 9 Unit labour costs in mainland Norway -quarter rise. Smoothed. Per cent. 99 Q - 7 Q Sources: Statistics Norway and

11 Wage share ) Per cent ) Labour costs as a share of factor income. Market-oriented mainland industry. Sources: Statistics Norway and Enterprise sector credit ) and liquid assets ) -month growth ). Per cent. January July 7 (C to June) - Total credit (C) 7 ) Mainland non-financial enterprises (C). ) Non-financial enterprises' liquid assets (M). ) Transaction-based growth estimate. Money supply (M) - Source: Statistics Norway

12 House prices and household debt Change on same month/quarter previous year. Per cent. January August 7 (C to July) House prices Debt Real estate business C Statistics Norway Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, Finn.no, ECON, Statistics Norway and Key rate 9 7 / / / / / / / Strategy interval /7 7 9 /7 Interest rate decision August MPR /7 9 7 Source:

13 Monetary Policy Report /7 Monetary policy strategy The interest rate path presented in MPR /7 reflects the Executive Board's trade-off between bringing inflation up to target and stabilising developments in output and employment. In the light of this trade-off, the interest rate will be increased gradually so that we can assess the effects of interest rate changes and other new information on economic developments. Given the inflation target, we will be mindful of the effects of higher interest rates on the krone exchange rate when inflation is low. The key policy rate should lie in the interval ½ ½% in the period to the publication of the next Report on October 7, conditional on economic developments that are broadly in line with the projections.