A Czech central banker backs a rate rise. Will the whole board agree on 5 November?
Jakub Seidler, one of seven people who set Czech interest rates, said on 27 October that he leans to a rise. They decide on 5 November.
What happened
Board member Jakub Seidler told Reuters he is inclined to back a rise of 0.25 percentage point at the meeting on .
Jakub Seidler said on that he leans to a rate rise at the Czech central bank’s next meeting, on . He is one of the seven members of its board, who vote on interest rates. He told Reuters: “I am inclined to back a standard 25-basis-point hike in November“. That is a rise of 0.25 percentage point. He added that he had not yet seen the analysis and advice from the bank’s staff.
Seidler has voted with the majority all year. In June the board raised its main interest rate by 0.25 point to 3.75%, six votes to one. In August and September it kept the rate at 3.75%, and all seven members voted for that.
The two-week repo rate thus remains at 3.75%. All seven members voted in favour of this decision. … At its next meeting, the Bank Board will decide between keeping interest rates unchanged and raising them.
Czech National Bank, Bank Board statement,
Other members are less sure. Deputy Governor Jan Frait told Bloomberg on that the reasons for a rise are “relatively strong“, but the outcome is not yet decided. Prices rose 2.5% in the year to September. Seidler expects yearly price rises to peak at about 3.5% early in 2027, above the top of the bank’s range of 1% to 3%. He said one more rise would not mean the start of a series of rises.
The board announces its decision at 14:30 Prague time on . At 15:00 it publishes a statement that gives the split of the votes. Its next meeting is on .
Sources: cnb.cz
The Pattern
We looked for cases where a voting member of the Czech central bank’s board said in public, between two meetings, that he would back a rate change at the next one. We found eight such times from 2022 to 2023, before six meetings. All eight times the member backed a rise.
Show the other 6 cases
The Read
In the eight times most like this one, at least one member always voted against the majority. The rate went up only when the meeting before had already raised it, in February and . The five times it did not go up, the member who spoke had already lost a vote for a rise at the meeting before.
This time is different from all eight. The board voted seven to none in August and in September, and Seidler voted to keep the rate both times, so he is changing his own vote. All eight earlier times came in 2022 and 2023, when prices were rising fast. Three of the seven members changed in , and all three rises came before that. Tomáš Holub spoke in three of the eight.
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