In an interview with Reuters, Czech National Bank (CNB) Board Member Jakub Seidler indicated he was inclined to support a 25 basis point interest rate increase at the Nov. 5 meeting, citing resilient domestic demand and persistently elevated energy prices. He would not view a potential increase as the start of a tightening cycle, favoring decisions at each meeting given global economic uncertainty. Headline inflation could temporarily peak at an average of around 3.5% in the first quarter of 2027, compared with 2.5% in September. That would exceed the CNB’s 1% to 3% tolerance range around its 2% target. Energy prices above the assumptions in the August forecast, domestic demand and nominal wage growth exceeding 6% point toward an upward revision to the 2027 inflation forecast. Seidler also expects the November outlook to show weaker growth, particularly in 2026, although economic activity should still accelerate in 2027. The CNB raised its main interest rate by 25 basis points to 3.75% in June. Seidler considered market pricing of four further increases over the next 12 months exaggerated, reinforcing his distinction between a possible November move and a sustained tightening cycle. His preference remains provisional, as he had not yet seen staff analysis and recommendations for the meeting.
Czech National Bank Board Member Jakub Seidler leans toward 25 basis point rate hike in November
In a Reuters interview, Czech National Bank Board Member Jakub Seidler favored a possible 25 basis point rate increase on Nov. 5, citing strong domestic demand and elevated energy prices, but rejected interpreting it as the start of a tightening cycle. He expects inflation could temporarily average around 3.5% in the first quarter of 2027, above the bank’s tolerance range, and anticipates an upward revision to its 2027 inflation forecast. He considered market expectations of four increases over the next 12 months excessive and had yet to review staff recommendations.