In a Bloomberg interview, Czech National Bank Governor Aleš Michl said the case for raising interest rates at the June 18 Bank Board meeting has strengthened and that a June move is now a live possibility. He framed any increase as a calibration of an already restrictive stance rather than a shift to tighter policy, even though headline inflation slowed to 2.1% in May. Michl pointed to domestic inflation pressures from strong wage growth, persistent increases in services and housing prices, and expanding money supply driven by household credit growth and the fiscal deficit. He said the bank still needs to fight core inflation, which remained elevated at 2.9%, and added that the European Central Bank's latest rate increase would not determine the Czech decision, which will rest on the board's own risk assessment. He also said political statements would not influence the bank's decision. The key policy rate has been held at 3.5% for more than a year. Michl said that if the bank does raise rates in June, his baseline would be to enter a period of assessment afterward, while declining to give guidance beyond the June meeting.
Czech National Bank2026-06-12
Czech National Bank governor says case for June rate hike has strengthened as core inflation remains at 2.9%
Czech National Bank Governor Aleš Michl said in a Bloomberg interview that the case for a June rate hike has strengthened and that a move at the June 18 meeting is a live possibility. He cited persistent domestic inflation pressures, including wage growth, services and housing prices, and money supply growth, with core inflation still at 2.9%. Any increase would calibrate an already restrictive stance rather than mark a broader policy shift.