INSTANT VIEW 1-Czech Oct annual CPI dips near 1-1/2-year low

    PRAGUE, Nov 8 (Reuters) - Czech consumer prices fell by a 
much sharper than forecast 0.5 percent in October from September 
on falling prices of natural gas, motor fuel and food, pushing 
annual inflation down near a 1-1/2-year low of 1.3 percent. 
    The fall from 2.7 percent a month ago brought annual 
inflation towards the bottom of the central bank's target which 
is to keep price growth within a plus/minus 1 percentage point 
band around a 3 percent mid-point. 
 
KEY POINTS: 
(pct change)          Oct         Sept         Oct forecast 
 month/month         -0.5        -0.7         -0.2 
 year/year            1.3         2.7          1.6 
 
 (Details of Oct inflation data..................[ID:nPRA001018] 
 (End-Oct unemployment figures...................[ID:nPRA001019] 
 
- The annual consumer price index (CPI) lowest since May 2005, 
reflecting a 5.5 percent fall in natural gas prices for 
households, set by the energy market regulator, fell 5.5 percent 
from October, following a 17 percent jump in October 2005. 
- Fuel prices down 5.5 percent month-on-month, the second 
decline after gains in the five preceeding months. 
- Food prices, which many analysts had expected to rise or show 
only a modest drop, decline 0.7 percent, mainly on falling 
vegetable and fruit prices and lower prices for baked goods. 
- Leisure prices ease 0.8 percent on seasonal cuts in domestic 
holiday costs; healthcare prices fall 0.6 percent on seasonal 
drop in spa treatment costs. 
- Other price categories show mainly minor changes. 
 
BACKGROUND: 
- The central bank held the key two-week repo rate steady at 2.5 
percent <CZCBIR=ECI> in October. Five out of six wanted no rate 
change, while the remaining one voted for the hike. 
- Report on last Czech c.bank rate decision      [ID:nL26548848] 
                                                 [ID:nPRA001007] 
- The central bank (CNB) targets headline inflation which it 
seeks to keep at 3 percent year-on-year, allowing for 
fluctuations by plus/minus one percentage point from this level. 
- The bank's newly-updated quarterly inflation prediction sees 
consumer prices rising 2.8-4.2 percent year-on-year in September 
2007 and 3.5-4.9 percent in March 2008. 
 
LINKS: 
- For further details on October other past inflation data, 
Reuters 3000 Xtra users can click on the Czech Statistical 
Bureau's website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-ISC 
 
- For LIVE Czech economic data releases, click on       <ECONCZ> 
- Instant Views on other Czech data                 [CZ/INSTANT] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH] 
- For Czech money markets data click on                <CZKVIEW> 
- Czech money guide                                      <CZK/1> 
- Czech benchmark state bond prices                   <0#CZBMK=> 
- Czech forward money market rates                      <CZKFRA> 
 
 ((Writing by Marek Petrus; Editing by Alan Crosby; 
prague.newsroom@reuters.com; Reuters Messaging: 
marek.petrus.reuters.com@reuters.net; +420 224 190 477)) 
  Keywords: ECONOMY CZECH INFLATION