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MNI CNB Preview - November 2022: Majority Clearly Tilted to No Hike

Executive Summary:

  • The CNB are seen keeping policy rates unchanged again in November, with vocal majority against further tightening
  • This leaves a hawkish minority (Mora, Holub), despite CPI re-accelerating in September
  • Consensus building around no further changes this year, leaving window open to rate cuts in H2'23
Full preview including summary of sell-side views here:

MNICNBPrevNov22.pdf

Inflation slipped to 17.2% from 17.5% in August, which will have bolstered the majority’s view of transitory inflation. This pullback in price pressures has not persisted however, with the September release at a new series high of 18.0%. Nonetheless, CPI turnouts hold below the bank’s assumptions of a 19.3% clip, and as base effects slip into the calculations, it’s likely CPI will moderate further from here – again the assumption of the majority of the rate-setting members.

The front page of the CNB website showcases the division among the board nicely. The website lists four MPC member interviews, three of which are transparently tilted against further rate hikes: “Zamrazilová – Seven per cent is high enough”, “Kubelková – We’re around peak inflation”, “Dědek – The interest rate differential seems sufficient for now”.

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