PRAGUE, Reuters – A Reuters poll revealed that the Czech National Bank will likely announce a further rate increase on November 4th and continue tightening at its December policy meeting.

In September, the central bank stunned markets with a 75 basis point hike. This was its largest since 1997. It did this to support inflationary expectations fueled by price growth.

According to seven poll respondents, the repo rate for the next two weeks would increase by 50 basis point to 2.00% on Thursday. The other five analysts saw a 75-basis points hike. This would take the main rate up to 2.25% pre-COVID levels.

Reuters has learned that Tomas Nidetzky is the Vice-Governor and that he anticipates that the board will debate both these options on Thursday. Tomas Holub however, was quoted as saying that a larger than-standard rise was required.

Five analysts projected the rate of interest to finish 2021 at 2.255%. Three others predicted it would be at 2.75%. And one forecasted at 2.50%.

Rate hikes have been a common strategy used by central European policymakers to fight rapidly rising inflation caused by global supply issues and rising energy prices, rebounding consumer demands and tight labor markets that push up wages.

The Czech consumer price index (CPI), rose to an all-time high of 4.9% in September. This is more than twice the target of 2% set by the central bank and well beyond the one percentage point tolerance range.

When all seven central bank members meet on Thursday, the board of directors will be able to provide the latest quarterly update to staff macroeconomic forecast.

Following their decision (which will be published at 2:30 pm (1330 GMT), Governor JiriRusnok will speak at a conference at 3:45 PM (1445 GMT), in which he will present the economic outlook.