Czech July CPI ebbs, confounding forecasts of rise

...interest rate increase near-term.

The consumer price index (CPI), a broad gauge of inflation targeted by the central bank (CNB), rose 0.4 percent in July from June , the Statistics Bureau said on Wednesday.

The annual inflation rate slowed to 2.3 percent from 2.5 percent in June. Analysts polled by Reuters had expected a monthly rise of 0.5 percent and a 2.6 percent annual gain in consumer prices [POLL/CZ].

The CNB had predicted 2.5-2.6 percent inflation for July in a quarterly projection unveiled last month following a 25 basis point hike in the main policy rate to 3 percent, the second such move this year [ID:nL26800751].

The jobless rate edged up to 6.4 percent in July as new graduates entered the labour market, coming in a touch below the analysts' forecast of a rise to 6.5 percent from June's long-term low of 6.3 percent.

The central bank has warned a tight labour market could push inflation higher, adding to price pressure stemming from robust economic expansion, which has topped 6 percent annually in the past eight quarters.

INSTANT VIEW OF CPI DATA.....................[ID:nL08620278]

[PRAGUE/Reuters/Finance.cz]