Czech c.bank: Oct CPI slowdown sharper than fcast

PRAGUE, Nov 8 (Reuters) - The Czech central bank (CNB) said on Wednesday the decline in October consumer inflation to near 1-1/2-year low was unexpectedly sharp, putting the annual rate 0.2-0.3 percentage points below its forecast.

Annual inflation eased to 1.3 percent, its lowest since May 2005, from 2.7 percent a month ago, according to data released early on Wednesday. The drop undershot even the lowest, 1.5 percent forecast in a Reuters poll of analysts.

"The deviation from the (CNB's) prediction was to the same degree caused by the development of food prices and so-called adjusted inflation excluding fuel prices," Tomas Holub, head of the bank's monetary and statistics deparment, said in a statement.

The CNB prefers to look at the adjusted rate -- net of tax and administrative price increases as well as volatile food and fuel prices -- to track the underlying trends in inflation. ((Reporting by Marek Petrus; Editing by Alan Crosby; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

Keywords: ECONOMY CZECH INFLATION CBANK