Czech National Bank raises interest rate to highest level since 1999

The board of the Czech National Bank has raised the key interest rate by 1.25 percentage points to 7 per cent, the highest rate since 1999. This was the seventh consecutive increase in the base rate by more than 0.25 percentage points. The reason for the significant increase is rising inflation and expectations that this will continue, the Czech News Agency reports.

Interest on bank deposits and loans is based on central bank interest rates. A higher base rate means more expensive loans for households and businesses.