Surveys suggest this message was understood by a majority of companies and 46  some households. By allaying fears about too-rapid a rise in rates, it is likely to have encouraged spending  and supported the economy. When the MPC did come to raise interest rates, in November 2017 and again in August 2018, it is interesting to see how well these were understood by companies and households. Around three-quarters of households, and around 90% of companies, had expected a rise in rates within the year ahead in surveys held immediately prior to the decisions. Simple, directional forward guidance on monetary policy appears, for this non-expert audience who comprise most of the spending in the economy, to have been effective. A second monetary policy example comes from the Bank’s quarterly Inflation Report. This was first produced over 25 years ago, as part of the first wave of the transparency revolution. It is a long and technical document, with language requiring at least 13-14 years of education to understand. 47  The  complexity of its language meant the Report was probably only accessible to around 10% of the population. 45  Bank of England (2013) provides a useful summary of concepts and issues relating to forward guidance; see Carney (2018) for a more recent discussion. 46 Carney (2018). 47 Haldane (2017a). 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  In November 2017, the Bank began publishing two simpler, “layered” versions of its Report.
Combined with low growth abroad and increased trade with low-cost countries such as China, this has led to a fall in import prices. The relatively high price increases of Norwegian products reflect high wage growth and a tight labour market. The krone exchange rate, measured against the trade-weighted index, has appreciated around 13 per cent in the last two years. However, the krone was exceptionally weak in mid-2000. The krone is 4-5 per cent stronger today than in the early 1990s, and about as strong as the previous high in early 1997. Thus, the recent strong showing of the krone is not without precedent. Changes in the oil price have time and again been an important factor behind exchange rate movements. Empirical evidence shows that the exchange rate is affected mainly by large fluctuations in the oil price. The krone tends to depreciate if the oil price is very low, as happened during the Russian crisis in 1998. On the other hand, the krone did not appreciate accordingly when the oil price surged from 1999 onwards. Hence, the relationship between the oil price and the exchange rate has not been evident for the last two years. Since late 2001, however, our currency may have been used as a hedge against the upside risk to the oil price, and this may have contributed to its appreciation. Another factor behind the appreciation of the krone is the current low risk premium in global currency markets (measured by a global risk index, GRI).