The Bank sought to do this by cutting interest rates to buoy up consumer spending. And the Government stepped up its own spending, which was helpful given the international environment. Although we couldn't avoid an overall slowdown altogether - the economy on the latest data ground to a halt in the fourth quarter of last year - we have managed for most of the time to keep the UK economy as a whole moving forward despite the recession in the internationally-exposed sectors of manufacturing. Of course we'd all have been much happier with better balanced growth. Stimulating domestic demand to offset the external weakness - the only option available to us - was very much a second best option. It was not without its own risks including the build-up of household debt and the current exuberance in the housing market. But it was better than doing nothing at all. That would have meant a much sharper slowdown, and probably recession, in the economy as a whole. And, given that inflation was well under control, it would have meant a quite unnecessary loss of overall output - and income and employment. In effect we took the view that unbalanced growth was better than no growth. It is perhaps less obvious that we could not have done more to weaken the exchange rate. At around $ - 1.50, sterling's value against the dollar through this period was not seen by most people even in the internationally - exposed sectors as a particular problem.
The global upturn, higher oil prices and low interest rates have contributed to pushing up growth. After falling sharply for several years, investment on the Norwegian shelf and oil service exports expanded last year. A number of signs indicate that capacity utilisation has continued to rise in recent months. The number of employed persons as share of the working-age population has increased, and unemployment has drifted down further. There is also an increase in the number of enterprises reporting capacity constraints. Chart: Inflation has risen Consumer price inflation has increased over the past year, partly reflecting higher wage growth. Tighter labour market conditions suggest that wage growth will increase further. The risk outlook is dominated in particular by the global developments mentioned. Over the past 5/6  BIS central bankers' speeches  year, rising protectionism and political uncertainty have weighted on global growth. The UK’s relations with the EU have yet to be clarified. If trade tensions deepen, growth among trading partners may be lower than projected. At the same time, the krone may remain weak, if global uncertainty persist. The target for monetary policy is annual consumer price inflation of close to 2 percent over time. Inflation targeting shall be forward-looking and flexible, so that it can contribute to high and stable output and employment and to countering the build-up of financial imbalances. At its meeting in March, the Executive Board noted that the monetary stance in Norway is accommodative. Underlying inflation is a little higher than the inflation target.