Transcript of the questions and answers from the press conference

Could you please summarise the debate today – the arguments of the two Bank Board members who voted for a rate cut and the counter-arguments of the majority that ultimately decided not to cut rates? And a more specific question: you said you decided to pause the rate cuts for the time being. This suggests that they may continue in the future. Could you give us a hint, based on the data you have now – which may change, of course – whether the pause will last only until, say, February or longer?

The arguments of the Bank Board members who voted for an interest rate cut were as follows: we expect worse developments, especially in Germany and more generally abroad, which would later exert more disinflationary pressure, or more anti-inflationary pressure, on the Czech economy.

As for your second question, we decided to communicate this as a pause in the rate reduction process. So, we are pausing the process of lowering rates for the time being. Nothing more, nothing less. We are keeping all doors open, but we currently think of it as a pause in lowering rates.

Just to clarify what you just said – can we take this to mean that at the next meeting you will again be deciding, like today, between stability and reduction?

Yes, that’s very likely. It’s the likeliest scenario now, but we are leaving all doors open. We’re taking a pause now. We’ll have a new forecast and we’ll assess the new data and above all the risks to the future path of inflation.

You mentioned several times that one of the upside risks to inflation was persistent price growth in services. How large an effect did this have on the decision to keep rates unchanged?

It had a big impact. Persistence of inflation in the services market is typical after a period of high inflation. Goods prices have now slowed, but the upward pressure on prices in services persists. In my view, it’s very important to tame this risk and ensure that services don’t rise as much, so that we get inflation back to the target around 2%.