Czech inflation hits 7-mth high, exceeds forecasts

...which could trigger an interest rate rise as early as this month.

The consumer price index (CPI), a broad gauge of inflation targeted by the central bank (CNB), gained 0.7 percent in April from March to take the annual inflation rate to 2.5 percent from 1.9 percent a month earlier, official data showed on Thursday.

The year-on-year growth in shop prices overshot the market's consensus forecast of 2.2 percent as well as the CNB's forecast of 2.1-2.2 percent, as it returned to the CNB's tolerance range of one percentage point either side of a 3 percent rolling goal.

Separate data released showed the jobless rate fell to 6.8 percent at the end of April from 7.3 percent at end-March, beating the market forecast of 6.9 percent, another sign that the labour market was tightening as the economy booms.

CNB policymakers left the main policy rate at 2.50 percent, the lowest level in the European Union, for a seventh straight month in April. But they said their inflation outlook implied a gradual rise in credit costs over the upcoming 12-18 months.

[PRAGUE/Reuters/Finance.cz]