Central Bank Says Inflation Miss Was Mainly Due To Surprise In Core Prices

The Czech National Bank released their comments on June CPI figures, with headline inflation slowing to +9.7% Y/Y, which was 0.4pp below the CNB's projection.

• The CNB says that CPI inflation adjusted for the first-round effects of changes to indirect taxes ("monetary policy-relevant inflation") rose by 9.5% Y/Y in June, missing the central bank's +10.0% forecast.
• Headline inflation missed the projection "mainly to weaker-than-expected core inflation," which was +8.3% Y/Y in June versus +7.5% pencilled in by the CNB in their Spring Forecast.
• A "deeper decline in fuel prices also contributing [to disinflation] to a lesser extent," while "somewhat faster growth in administered prices affected the deviation from the forecast in the opposite direction."
• "The observed price developments bear out the expectations of the spring forecast that inflation will continue to fall sharply during spring and summer. Year-on-year price growth will also slow quickly in the months ahead."
• Click here to see the full commentary.