Central bank board likely to raise interest rates by 1.25 percentage points on Wednesday

The Czech National Bank's board is likely to raise interest rates by up to 1.25 percentage points on Wednesday, the Czech News Agency reported citing leading economic experts. This would bring the base rate to seven percent, the highest since 1999. The reason is the soaring inflation which jumped to 16 percent in May, accelerating from 14.2 percent in April, and is expected to peak at 18 percent in July.

The fact that the incoming governor Aleš Michl, who is due to take up his post in July, is an opponent of the current rate hikes, is also likely to have an impact on the decision, according to economists.