Czech central bank significantly ups rate as inflation soars

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The Czech Republic’s central bank has raised its key interest rate to 1.50% for three quarters, in an effort to cushion rising inflation as the economy recovers from the coronavirus pandemic

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Thursday’s move was the largest single rate hike since 1997 and the third increase in as many months.

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Analysts had mostly predicted a half-point increase. The central bank sees high inflation as a major threat.

Inflation rose to 4.1% in August, well above the bank’s target of 2%. According to the country’s statistics office, the Czech economy posted a record growth of 8.1% year-on-year in the second quarter.

The last time the bank changed its rates was in August, when it raised the key interest rate by a quarter point to 0.75% to tackle inflation.

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