Transcript of the questions and answers from the press conference

Could you please tell us a little more about the debate on a possible pause in rate cuts in the coming months? And, as one member of the Bank Board voted for rate stability today, how deep was the debate about whether to pause the cycle today? My second question is whether you discussed the possible impacts of the US election in any way.

We had two alternative scenarios on the Bank Board. One assumed higher-than-expected inflation persistence, and one member preferred to be very vigilant and not underestimate the achievements made so far in reducing inflation. I can’t say how deep the debate was, but we did discuss when and how to possibly stop the process of cutting rates. That’s also why we put it in the statement.

As far as the US election is concerned, we debated this, but we can see no specific impacts yet.

The new forecast is moving in a slightly stagflationary direction, lowering the outlook for economic growth and implying a further sharper reduction in interest rates, and at the same time raising the inflation forecast, as you said yourself. Can you please explain this two-way nature of the forecast? Which of the two stories is the majority of the Bank Board focusing on – on the risk of higher-than-targeted inflation as indicated by the forecast, or on the worse economic growth, which implies a further, sharper decrease in interest rates.

The vast majority of the Bank Board members are now looking at the risk of elevated inflation in the future. We stated that the process of reducing inflation was not over. Our policy must remain tight so that inflation declines to 2% again next year, even though a temporary rise in inflation will occur at the turn of the year.

How much is the crisis in German industry reflected in the current forecast? The Czech economy has strong links to it. How do you expect – in connection with the current developments in Germany – the economic and political situation there to continue to affect the Czech economy in the future?

What is happening in Germany, and the downturn in industry in Germany, means a risk of stagnation of the entire Czech economy – not only the automotive industry. It’s an anti-inflationary risk. We talked about it a lot. So yes, it’s reflected in our forecast. However, most central bankers are looking more at the risk of higher inflation than at the risk that we should react to this economic downturn.