RPT-POLL-Czech CPI seen quickening to 10-month high in July

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* WHAT: July consumer inflation, unemployment

* WHEN: August 8, 0700 GMT

* Consumer prices seen up 0.5 percent month-on-month, 2.6 percent year-on-year. End-July unemployment rate seen at 6.5 percent.

By Mirka Krufova and Marek Petrus

Czech consumer inflation is likely to have quickened to its fastest pace in 10 months in July, a Reuters poll showed on Wednesday, reinforcing the case for higher interest rates in the months to come.

The consumer price index (CPI), a broad gauge of inflation targeted by the central bank (CNB), is expected to show a rise of 0.5 percent in July from June , according to the median forecast of 13 analysts in the poll.

This would take the annual inflation rate to 2.6 percent from 2.5 percent in June, its highest since 2.7 percent in September 2006.

The inflation data are due for release on Aug. 8, along with end-June unemployment numbers.

The analysts' median forecast was for the jobless rate to show a seasonal uptick to 6.5 percent of the workforce from June's long-term low of 6.3 percent.

"Year-on-year inflation will pick up slightly because of food prices. July also sees a seasonal rise in package holiday prices," said Ceska Sporitelna analyst David Navratil.

"The July number will not significantly deviate from the CNB's forecast, so there will be nothing on the inflation front to make the CNB alter its hawkish rhetoric," he added.

The CNB predicted 2.5 percent inflation for July in its new quarterly projection unveiled last week following a 25 basis point hike in the main rate to 3 percent in the second such move this year [ID:nL26800751].

Inflation has risen to within the tolerance range of one percentage point either side of the CNB's 3 percent goal, mainly on the back of hikes in government-regulated energy and rent prices and a delayed impact of increases in tobacco taxes.

However, analysts and central bankers alike have cautioned against a blossoming of price pressures stemming from buoyant consumer demand and signs of labour shortages in the economy whose growth rate has topped 6 percent in past quarters.

The CNB's projection, based on further rate hikes over the next year and a half, sees inflation quickening to 4.3 percent in January and hovering above the 4 percent edge of the CNB's target band until the end of next year.

As in past years, a renewed firming in the crown might improve the inflation outlook. Some analysts said the crown's rise over the past four weeks to Friday's 3-1/2-month highs versus the euro could tame policymakers' tightening resolve.

"We do not expect the data due for release in July to provide any massive support for a swift and immediate increase in interest rates," said Ales Michl, analyst at Raiffeisenbank.

"The firming crown could also chill the market's rate hike expectations, eliminating the need for higher rates for three to five months. The upside risks prevail, however," he added.

The crown has gained 2.7 percent to Wednesday's 28.0 per euro since the start of July [CZK/]. A firmer currency quickly tames inflation in the small and open Czech economy.

- OVERVIEW OF ECONOMIC FORECASTS: [ID:nL01756798] - SUMMARY OF COMMENTS BY CNB POLICYMAKERS: [ID:nL26743022]

Keywords: CZECH ECONOMY/FORECASTS

[PRAGUE/Reuters/Finance.cz]