The Czech National Bank said annual inflation fell unexpectedly to 1.5% in June from 2.1% in May, returning to levels seen at the start of the year after the earlier rise linked to the Middle East conflict. It attributed the drop mainly to volatile components, especially a partial correction in fuel prices and a sharp fall in food prices, while underlying price developments changed little. Core inflation slowed only marginally to 2.8% from 2.9%, and the bank said headline inflation should stay close to 2% in the second half of 2026 and slightly above that level at year-end. The June reading was below the Spring 2026 Monetary Policy Report forecast of 2.1%. Fuel prices had raised inflation by almost 1 percentage point in March and April, and although they have since partly reversed, they remained 17.5% higher year on year in June and about one-fifth above February levels. Food prices fell 1.3% month on month and 3.4% year on year in June, the steepest annual decline in two years, reducing headline inflation by 0.6 percentage point. Within core inflation, services inflation eased to 4.5% from 4.6%, including a slowdown in imputed rent to 5.2% from 5.3%, while goods inflation edged up to 0.4% from 0.3%. The bank said elevated core inflation and rising global inflation pressures remain reasons for caution.
Czech National Bank2026-07-10
Czech National Bank says June inflation fell to 1.5% as food and fuel prices eased but core inflation remained elevated
The Czech National Bank said June annual inflation fell unexpectedly to 1.5% from 2.1%, below its 2.1% spring forecast, mainly because food prices dropped sharply and fuel prices partially corrected. Core inflation eased only slightly to 2.8%, and the bank said persistent services inflation and stronger global inflation pressures still warrant caution. It expects headline inflation to remain around 2% in the second half of 2026 and slightly above that level at year-end.