Employment is growing sharply in the public sector and the construction industry. In recent years, consumer price inflation has been higher in Norway than among our trading partners. The year-on-year rise in prices was 2.4 per cent in September. Stable prices for imported consumer goods is contributing to containing inflation in Norway. The rate of increase in prices that is primarily influenced by domestic costs is high. It is not a new phenomenon that Norway is at a different stage of the business cycle than the euro area countries. One reason for this is that changes in the external environment often have a different impact on the Norwegian economy than other European economies. For example, a sharp rise in oil prices has a dampening impact on purchasing power and the activity level in the euro area. In contrast, this tends to boost petroleum investment and household confidence in Norway. The development of a national oil industry and restructuring in the 1980s and 1990s have also contributed to a cyclical path that is specific to Norway. For example, petroleum investment was probably one of the main driving forces behind the booms in the mid-1980s and in 1997-1998. 4  BIS Review 90/2001  BIS Review 90/2001  5  Norwegian labour costs have risen by 5-6 per cent annually in recent years, while labour costs in the euro area countries have increased by less than 3 per cent annually. When cyclical developments are not synchronised and labour costs are at different levels, interest rates will also vary.
Mr Bäckström discusses the monetary policy situation in Sweden Speech by the Governor of the Bank of Sweden, Mr Urban Bäckström, at Stockholm Chamber of Commerce and Veckans Affärer on 2/2/99. Thank you for the invitation to attend this conference and talk about “The krona and the interest rate”. I shall be speaking mainly about the current monetary policy situation and the factors that may be crucial for the policy’s future formulation. However, now that the Riksbank is directed by the six members of the new Executive Board, which also makes the monetary policy decisions, the decision-making process has changed. So I shall begin by briefly describing how monetary policy will be decided and presented in this new environment. The new process for monetary policy decisions At 1pm on Thursday 11 February, the new Executive Board of the Riksbank will be convening for its first meeting specifically devoted to monetary policy. Compared with the Board’s ordinary sessions, the discussion at what are called monetary policy meetings is to cover monetary policy more comprehensively and conclude with a decision on the policy’s future stance. The discussion will be minuted and published in this form on 6April, around eight weeks after the event. Moreover, a brief account of the grounds for the decision will be presented in a communiqué on the day after the meeting, in this case at 9.30am on Friday 12 February.