Czech inflation edges up but lags c.bank target

...the central bank's target which supported expectations of flat interest rates in the near term.

The consumer price index (CPI), a broad gauge of inflation targeted by the central bank (CNB), rose 0.3 percent in March from February to take the annual inflation rate to 1.9 percent, matching the median forecast of 14 analysts polled by Reuters.

The statistics bureau, which published the data on Tuesday, attributed the CPI rise to a tobacco price increase reflecting a past sales tax increase and a renewed rise in fuel prices after six consecutive months of declines.

Annual inflation quickened from 1.5 percent in February and a 1-1/2-year low of 1.3 percent in January, but remained stuck below the CNB's tolerance range of one percentage point either side of a 3 percent goal.

CNB policymakers voted unanimously to leave the benchmark repo rate at 2.50 percent for a sixth consecutive month last month after agreeing that they lacked strong arguments for either a rise or a cut.

The CNB has paused since tightening policy by a cumulative 75 basis points between October 2005 and September 2006 to prevent record economic expansion of some 6 percent annually from fuelling inflationary pressures.

A separate report showed the unemployment rate fell to 7.3 percent of workforce in March, undershooting the 7.4 percent consensus forecast and matching the lowest levels on record seen also in November 2006.

CNB policymakers warned in minutes from their meeting last month that labour shortages could fuel inflation as booming economic growth is drying up the pool of available workers and risks pushing salaries higher.

INSTANT VIEW ON MARCH CPI......................[nL10472601] DETAILS OF MARCH JOBLESS DATA..................[nPRA001240]