INSTANT VIEW 2-Czech Nov annual CPI rises to 1.5 pct

    PRAGUE, Dec 8 (Reuters) - Czech consumer prices dipped 0.1 
percent in November, in line with forecasts on falling prices of 
natural gas and motor fuel, putting the annual inflation rate at 
1.5 percent. 
    The growth from 1.3 percent annual CPI a month ago brought 
the inflation rate 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)          Nov         Oct          Nov forecast 
 month/month         -0.1        -0.5         -0.1 
 year/year            1.5         1.3          1.5 
 
 (Details of Nov inflation data..................[ID:nPRA001072] 
 (End-Nov unemployment figures...................[ID:nPRA001073] 
 
- Fuel prices down 2.7 percent month-on-month, the third 
decline after gains in the five preceeding months. 
- Food prices increase 0.1 percent, mainly on growing prices of 
baked goods, potatoes and milk. 
- Leisure prices ease 0.7 percent on seasonal cuts in domestic 
and foreign holiday costs; healthcare prices fall 0.5 percent on 
seasonal drop in spa treatment costs. 
- Other price categories show mainly minor changes. 
 
COMMENTARY: 
    ALES MICHL, ANALYST, RAIFFEISNEBANK, PRAGUE 
    "Inflation is staying in check thanks to the strong crown 
and a fall in the natural gas prices and petrol. 
    "Toward the end of the next year, inflation will rise toward 
4 percent due to electricity, cigarettes, and rents. 
    "We will have the lowest interest rates in the EU over 
Christmas, one percentage point below the euro zone. This 
differential will remain in the first quarter, when, in our 
opinion, both the Czech National Bank and the European Central 
Bank will raise by a quarter of a percentage point." 
  
MARKET REACTION: 
    Crown a touch firmer at 27.96 to the euro <EURCZK=> from 
27.99 ahead of the data. 
  
BACKGROUND: 
- The central bank held the key two-week repo rate steady at 2.5 
percent <CZCBIR=ECI> in November. 
- Report on last Czech c.bank rate decision       [ID:nL3091748] 
                                 [ID:nPRA001058] [ID:nPRA001059] 
- 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 November 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 Jan Lopatka; Editing by Alan Crosby; 
prague.newsroom@reuters.com; Reuters Messaging: 
jan.lopatka.reuters.com@reuters.net; +420 224 190 477)) 
  Keywords: CZECH ECONOMY/INFLATION