Czech inflation accelerated in April, driven by higher fuel costs, pushing the consumer price index to 2.5% year‑over‑year, matching the median forecast of Bloomberg’s analyst poll. Services prices jumped to 4.8%, a level policymakers label as elevated. The Czech National Bank (CNB) is slated to meet Thursday, with markets expecting it to keep the policy rate unchanged.

Policymakers weigh the inflationary shock from surging energy prices against a weakening global outlook, strained by the Middle East conflict. CNB officials have repeatedly said they will not react to the primary fuel surge but will monitor any spill‑over into broader price dynamics. UniCredit chief economist Martin Komrska warned that a gradual pass‑through could trigger a rate hike, though he doubts board consensus before autumn.

With the benchmark rate sitting at 3.5%, forward‑rate agreements now price roughly three‑quarter‑point hikes over the next year, reflecting renewed tightening bets after the Iran war. Food price volatility kept headline inflation in check, but officials anticipate an agricultural cost surge later in the year. All surveyed analysts expect the CNB to hold the rate for an eighth consecutive meeting.