Czech core inflation, which strips out food and energy, climbed to 3.1% in September, topping the Czech National Bank's 2.9% call for the month. The figures, released Tuesday, came with a note that prices for market services and goods both sped up "slightly." The bank did not link the data to any policy decision.
Core inflation surprises are what actually move rate expectations. Market Briefs covers European data free every morning.
After a quarter-point increase in June, the CNB kept its key rate unchanged at the last two meetings. Minutes from September indicated officials could look to tighten monetary settings "slightly further" if domestic pressures stay firm and energy costs remain high. The next decision lands Nov. 5, and officials have said they will choose between another hike or staying put.
The backdrop is firming for a possible move. As Raiffeisenbank's Tereza Krcek in Prague put it before the data, "Persistent core inflation near the 3% upper bound of the tolerance range, in combination with rising agriculture costs, solid wage growth, looser fiscal policy and geopolitical tensions are boosting the likelihood of an increase in the key interest rate to 4% in November."
A hot print narrows what a central bank can credibly do. Get the free Market Briefs daily newsletter and follow it.
