Czech MPC raises prospect of rate hike this year

The Czech MPC’s statement accompanying today’s rate-setting meeting was generally quite dovish, but it does looks like the Council intends to start raising interest rates, albeit very slowly, this year. Accordingly, we are now pencilling in one hike in the policy interest rate, to 0.25%, in 2017 (previously we expected rates to stay on hold this year). Our forecast for the policy rate to end 2018 at 1.00% remains unchanged.