Czech central bank raises key interest rate to four percent

The Czech National Bank raised its key interest rate by a quarter of a percentage point to four percent on Thursday, the highest level since early 2025. The decision was widely expected by financial markets amid forecasts of accelerating inflation next year. Higher interest rates generally make mortgages and business loans more expensive, while increasing returns on savings and bank deposits. Central bank governor Aleš Michl is due to explain the decision at a press conference and present a new macroeconomic forecast that informed the bank board's decision. The rate increase marks a further tightening of Czech monetary policy.