The CNB Bank Board is likely to leave interest rates on its Wednesday-Policy meeting without changing existing levels. The main reason is still persistent higher prices in the service sector, rapidly rising wages, which are also pushing the prices of services, the tense labor market and brisk rising real estate prices. Overall, increased consumption can lead to a slightly higher inflation value in the Czech Republic. At the same time, the current interest rates have approached the neutral level and their restrictive effect is thus fading. Therefore, the debate on a possible slight increase in rates is therefore not completely excluded in the future. You can find out more in the following paragraphs. At its September meeting, the CNB Bank Board is very likely to leave interest rates again at existing levels. The Bank Board will decide mainly because of the relatively high core inflation, and thus the still persistent high prices in the service sector simultaneously supported by growing wages. Increasing wages are a significant cost component in the service, in other words, the service sector is much more linked to human work, where they show all the more. In addition, increasing wage growth is reflected in larger consumer apatites. Thus, domestic demand is also increasing and subsequently the overall consumption, which in turn can lead to consumer prices in the Czech Republic to stay at slightly higher levels for a long time or potentially even increase slightly again. The CNB will want to leave the CNB unchanged even because of the strongly rising real estate prices, but also because of the tense labor market and any more relaxed fiscal policy before the October parliamentary elections. What other arguments for this CNB decision play a role? At the same time, the CNB has practically approached the so -called neutral interest rate, where the current rates do not act as restrictively as before. Especially in the fight against the high inflation in service. Therefore, we will not be able to reduce rates at the upcoming session. On the contrary, although it is not currently on the agenda of the day, in the foreseeable future due to pro -inflation factors, there is no debate about a possible slight increase in rates. This, especially because of the still high prices in the service sector, very visible especially in the hospitality and accommodation services, AI markedly rising real estate prices. As far as the service sector is concerned, so to put it simply, let us remember that in recent times we have quite often found in practice that the prices of many recreational activities and holidays virtually throughout the Czech Republic associated with hospitality and accommodation are compared with foreign offers and holiday possibilities. In frequent cases, these consumers may also be temporarily cheaper. Recently, the service sector has been very often perceived by foreign tourists because of its stronger price resistance, especially with comparison with the recent times. Inflation recorded in the prices of goods has thus alleviated very markedly compared to the above -mentioned prices in services in the last longer months. How will the CNB meetings are likely to take and what can they impact? In short, a strong growth of real wages, the tense labor market, the relatively good data from the Czech economy, continues to go to the slightly higher interest rates of resistant high prices in the service sector and significantly rising real estate prices. Thus, these are factors that leave the rates at slightly higher levels either so much limit – such as better economic condition – or leaving rates even require for their coolers. This applies in particular to wage growth, high prices in the service sector or briskly rising real estate prices. Therefore, the CNB Bank Board at the September meeting is most likely to resort to the next and already several interest rates at the current levels in a row. Even in the foreseeable future, the possibility of a maybe debate about a slight increase in interest rates. It is not currently on the agenda, but it is not possible to exclude at the following meetings. The hawk setting of the CNB Bank Board can then be related, among other things, in connection with the growing interest swaps with a longer maturity, which have been reflecting the CNB Bank Board for several months. Higher interest swaps subsequently in the foreseeable months may manifest by suspending decreasing mortgage rates. They can even support their moderate increases. The scenario on the possible admission of a debate on a slight increase in interest rates at the following monetary-political meetings can also contribute to this. Czech five -year interest swaps, which have an influence on the average rate of mortgage in the Czech Republic, already in August increased by a slight 0.03 %.
Petr Špirit has been dealing with the current development not only in financial markets for more than nine years. In the framework of analytical activities, Bidli specializes primarily in the real estate and mortgage market, energy and investment. It also focuses on stock and commodity markets and monetary policy. He regularly writes articles on these topics and sectors and processes analyzes that are subsequently published. He worked for several longer years in one of the well -known large brokerage companies. At the same time, he was at the birth of several economic programs and news.
Bidli is a Czech company that offers comprehensive services in real estate, housing financing, construction of family houses and energy solutions, including photovoltaics and heat pumps. Thanks to its own specialist network, it can provide clients the whole process – from finding real estate to its equipment and insurance. The company's vision is to simplify the way to modern and sustainable housing. Clients have access to advice on mortgages, investment and energy, all under one roof. Bidli builds on transparency, availability and innovation that help people live better. More at www.bidli.cz/