Minutes Reveal Kubelkova, Prochazka & Holub Were Hawkish Dissenters

The minutes of the Czech National Bank's most recent monetary policy meeting showed that Karina Kubelkova, Jak Prochazka and Tomas Holub cast the three dissenting votes for a 25bp rate hike, with the motion defeated by a margin of just one vote.

• The Bank Board concluded that the risks to the outlook are significant and go in both directions. On the hawkish side, they took note of expansionary fiscal policy and the threat of a wage-price spiral. On the flip side, "a stronger-than-forecasted downturn in domestic consumer and investment demand was a downside risk."
• There was little optimism among policymakers about the potential for the government's fiscal consolidation package to provide an anti-inflationary impulse. Prochazka and Kubelkova pointed to the length of its implementation and transmission, while Holub and Zamrazilova flagged the risk of second-round effects from the planned increases in indirect taxes.
• The minutes show that Karina Kubelkova and Jan Prochazka voted for a 50bp rate hike in the first round of voting, which suggests that they have taken over from Tomas Holub as most hawkish members. In the second round of voting, they joined Holub in voting for a 25bp rate hike but were outvoted by members preferring to stand pat.
• Click here to see the full minutes.