The seven voting members of the Czech National Bank (CNB) will vote on interest rates on Wednesday this week. Most analysts expect that the rates will stay the same, and the vote will be the same as during the last meeting 5:2, with Vojtech Benda and Tomas Holub preferring higher rates. The current rate, which is used as a base for setting loan rates, is set at 2%.
The Head Economist for Deloitte David Mark remarked that on the one hand the economic growth is slowing and industrial production is actually falling, but on the other hand inflation is quickening and the real estate market is overheating. This phenomenon can last many months and in the meantime the rate will most likely stay stable.
The decision will be seen as a predictor of future loan and mortgage rates. Currently the trend is stable after falling earlier in the year. Most analysts see stability eventually losing out to lower interest rates as food prices and living expense increases slow down.
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