Industrial producer prices (PPI) grew just 0.9% year-on-year and fell 0.1% month-on-month in November, according to data released by the Czech Statistical Office on December 18.

Agricultural producer prices rose 10.1% y/y and 0.3% m/m, with eggs up 43.3% m/m. Construction prices edged up 1.8% y/y and 0.1% m/m, and market services increased 1.6% y/y and 0.1% m/m.

The PPI figures represent a further slowdown when compared to November’s data, when the index was up 1.1% y/y and was flat m/m, and will reinforce sentiment that the central bank is likely to postpone making any further increase in interest rates at its monetary policy meeting on December 21.

Analysts at Komercni banka said the figures were surprising, particularly in view of the rise in oil prices, but partly reflect the ongoing appreciation of the koruna.

“This will slow down consumer price growth, which peaked in October. Nevertheless, the slowdown will not be as pronounced as domestic factors (with wage growth in the lead accompanied by increase in administrative prices) will still act strongly pro-inflationary,” KB said, predicting that consumer price inflation will hit 2.5% in the first half of 2018 before slowing to 2% in H2.

“We believe that at the moment, the CNB is in no rush with hiking and it will stay on hold in December. Yet, overall inflationary pressures remain strong, and thus the central bank will hike the rates 25bp in each quarter,” the bank said.