Czech headline inflation rises in December, CNB likely to hike rate again in February

The Czech consumer price inflation accelerated at the end of last year. The headline print came in at 2.4 percent on a year-on-year basis, coming in line with expectations. On a sequential basis, inflation rose 0.1 percent in December.

Food and non-alcoholic beverages mainly drove the rise in the year-on-year rate of December inflation and in general the whole of 2017. However, this is likely to change in 2018, noted KBC Market Research.

Prices related to housing, such as electricity, water, gas and prices of heat and hot water, are expected to mainly contribute to the headline consumer price inflation at the start of this year. According to KBC Market Research, the outcome of the December inflation underpins the view for another hike in interest rate from the CNB in early February.

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