- • Czech January inflation will approach 7%, hitting a 9-year high.
- • The National Bank’s new inflation forecast is likely to be more pessimistic in the short term, while more positive for the next 12-18 months.
- • The inflation shock should temporarily increase expectations for more aggressive hikes in rates, pushing the koruna to new all-time highs.
In the last quarter of 2007, we were confronted with numerous unpleasant inflation surprises, but this is not the end of the influx of unfavourable figures. The greatest inflation shock may still occur as early as February 8, when January’s inflation, which we put at nearly 7%, will be released. Paradoxically, the CNB Bank Board will discuss interest rate settings the day before.
