Analysts: ČNB set to raise key interest rate to 1.25 per cent

The Czech National Bank will likely raise its key interest rate by a quarter percentage point to 1.25 per cent at its board meeting on Thursday, according to a poll of analysts by state news agency ČTK.

ING chief economist Jakub Seidler told the news agency there is an 80 per cent chance of a rate hike, according to market predictions.

The reasons are the unexpected weakening of the koruna, rising inflation and the tight labour market. The annual inflation rate rose to an eight-month high of 2.6 per cent in July. The unemployment rate, at 2.9 per cent, is at its lowest level in 22 years.