Czech June inflation shows highest growth in two years, up 2.9 percent

Consumer prices in the Czech Republic in June showed the highest year-on-year growth in more than two years, rising by 2.9 percent compared with June 2003, according to official figures released on Monday. The price of goods and services was up in most sectors, largely influenced by a rise in value added taxes earlier this year from five to 19 percent. Cigarette and alcohol prices rose particularly in June. For the first few months after January's VAT hike retailers had been selling old stock at the same price as before but a 7.5 percent rise on new stock kicked in last month. The overall rise in prices, the highest since April 2002, was slightly below analysts' forecasts of three percent. Compared to May, consumer prices rose by 0.2 percent in June, also slightly below predictions of 0.3 percent.