The Czech National Bank left its two-week repo rate unchanged at 3.75% in September 2026, in line with expectations, marking a second consecutive pause. Annual inflation accelerated to 1.9% in August from 1.7% in July, its highest level since May, yet it remained just below the central bank’s 2% target.
Policymakers pointed to several persistent sources of inflationary pressure, including resilient domestic demand, strong wage growth, solid credit expansion, and an expansionary fiscal stance. They also warned that the base effects stemming from earlier energy subsidies could become less favourable, partially reversing their previous dampening impact on inflation. In addition, the repercussions of the conflict involving Iran and continued elevated energy prices were highlighted as key risks to the inflation outlook.
