Czech c.bank meeting starts, mkts expect rate hike

...interest rates for the first time in eight months.

The CNB's key policy rate now holds at 2.50 percent , a record 125 basis point below the euro zone equivalent, following increases totalling 75 basis points between October 2005 and September 2006.

The CNB has not set a time for any announcement on the results of the meeting, but it usually publishes a statement sometime after 12 p.m. (1000 GMT).

It called a news conference for 3:30 p.m. (1330 GMT).

Eighteen of the 20 CNB watchers polled by Reuters last week predicted policymakers would raise the rate by 25 basis points to a more than 4 year high at their Thursday's meeting to tame resurgent inflation.

One saw such a rate rise is likely in either June or July and another one said it would only come in July. [CNB/INT]

Markets have said the unexpected strength of the economy in early 2007, fuelled by record-high retail sales growth and a consumer credit boom, supported their view that tighter policy was needed to pre-empt demand-pull pressure on consumer prices.

[PRAGUE/Reuters/Finance.cz]