Czech consumer prices (inflation) rose by 2.5% year-on-year (y/y) and by 0.5% month-on-month in April, according to the flash estimate released by the Czech Statistical Office (CZSO).

Inflation growth accelerated on the 1.9% y/y growth registered in March after it slowed down to nearly ten-year low of 1.4% in February but has been steadily accelerating amid the US and Israeli attacks on Iran and global uncertainties, while the local market expects the inflation to rise further in the upcoming months.

“Growth of fuel was dominantly behind the acceleration of overall inflation in April,” head analyst at Citfin consultancy Miroslav Novák was quoted as saying by Czech Press Agency (CTK).

He added that fuel prices “rose y/y nearly by a quarter” and that the lower consumption tax on diesel, introduced by the government in response to the spiralling fuel price growth in connection with the conflict in the Middle East, “compensated the growth of fuel only minimally”.

Despite the expectations of further rise in inflation, the country’s regulator Czech National Bank (CNB) is widely anticipated to keep the main interest rate at 3.5%, where it has remained since last May.

“The monetary policy likely won’t respond to the current rise in inflation immediately,” Deloitte’s head economist David Marek told CTK, projecting, nevertheless, that “increased attention” will be paid to “the combination of significant external cost shock, loosening of fiscal policy and the growing domestic demand”.