Czech inflation rises to 2.5 percent as fuel costs climb and rents increase

Czech inflation accelerated to 2.5 percent in September from 1.9 percent in August, driven primarily by higher fuel prices and a smaller decline in food prices, the Czech Statistical Office said Tuesday.

Prices were unchanged overall compared with August. The increase in annual inflation therefore describes a widening gap with September 2025, rather than an across-the-board monthly price jump.

The annual figure matched April’s reading, the highest so far this year, and exceeded the Czech National Bank’s forecast by 0.3 percentage points. Analysts said the result increased the likelihood of an interest-rate rise at the bank’s November meeting.

Fuel and lubricant prices were 37.5 percent higher than a year earlier, making them a major contributor to September’s inflation.

Czech National Bank monetary department deputy director Jakub Matějů linked the increase to the continuing conflict in the Middle East, elevated oil prices and higher refining costs.

Government measures introduced in October, including fuel price regulation and a reduction in diesel excise duty, will only appear in October’s inflation figures, he said.

Housing and services also became more expensive. Rents increased 6 percent year over year, restaurant and catering services rose 3.8 percent, and accommodation services climbed 7 percent.

Prices for spirits, wine and beer increased, while tobacco products cost more than 7 percent more than a year earlier.

Several grocery staples nevertheless remained substantially cheaper. Butter prices fell 37.3 percent, long-life semi-skimmed milk was approximately 20 percent cheaper, pork fell 15.5 percent and eggs declined 12.6 percent.

Overall, goods prices rose 1.2 percent annually, while service prices increased 4.6 percent. The difference means households’ experience of inflation will vary with how much they spend on housing, transport, food and services.

Core inflation, which excludes selected volatile items, accelerated to 3.1 percent from 3 percent. Matějů said underlying price growth strengthened in both goods and services.

Ecovis adviser Jan Slabý said inflation could approach 3 percent toward year-end, increasing the probability that the central bank would adjust its policy rate.

A rate increase remains a possibility rather than a decision. The bank last changed its main rate in June, raising it by a quarter of a percentage point to 3.75 percent. Gov. Aleš Michl said in September that the next decision would be between leaving rates unchanged and raising them.

Separately, an analysis by investment platform Portu ranked Czechia’s inflation eighth lowest among 42 European countries it follows. All four neighboring countries recorded higher rates, according to that comparison.

For households, the immediate picture is mixed: some groceries remain cheaper than a year ago, while fuel, rent and services are exerting greater pressure. October’s data will show how much the new fuel measures offset that pressure.