PRAGUE, Oct 9 (Reuters) - Czech consumer prices dipped by0.1 percent in September versus a month earlier, bringing annualinflation to 3.4 percent, statistics office data showed onTuesday.
Both the monthly result and the annual rate were exactly inline with predictions in a Reuters poll.
The annual rate, influenced by a sales tax hike in January,was just below the central bank's forecast of 3.5 percent, butabove the bank's target range of 2 percent plus/minus onepercentage point.
The statistics office said the data was influenced by a dropin prices in the sector of recreation and culture, while pricesin transportation, clothing and footwear rose.****************************************************************KEY POINTS:CONSUMER INFLATION(pct change) Sept Aug Sept fcastmonth/month -0.1 -0.1 -0.1year/year 3.4 3.3 3.4
Details of September data.................
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"The biggest influence was the rise in the price of crudewhich led to an increase of fuel prices. However, this wascompensated for by a drop in other parts, mainly a seasonal dropin prices of recreation.
"Core inflation remains moderately negative. There is noreason for the central bank to change its stance. It canmaintain very loose monetary policy and if needed it can evenuse FX interventions."
- The monthly development was affected by a 13.2 percent drop inthe prices of holiday packages due to an end of the season.- Prices of mobile phones dropped by 1.3 percent.- Food prices were driven lower by a 1.3 percent drop in theprice of eggs and cheese, a 1.5 percent drop in the price ofyoghurts and a 5.6 percent decline in the price of butter.- On the contrary, prices in transportation grew, driven by a2.6 percent monthly rise in fuel prices.- The year-on-year acceleration from August's 3.3 percent wasmainly due to quickening in the rise of fuel prices to 9.6percent in September from 6.5 percent in August.
- The central bank (CNB) cut the key two-week repo rate by 25basis points to 0.25 percent
on September 27, 2012.- Report on last Czech c.bank rate decision......
- The central bank targets headline inflation, which itseeks to keep at 2 percent year-on-year, allowing forfluctuations by plus/minus one percentage point from this level.- The CNB's quarterly prediction sees consumer price inflationof 2.3 percent in the third quarter of 2013 and at 2.3 percentin the fourth quarter of 2013.- The central bank next meets on interest rates on November 1.
- For further details on September and other past inflationdata, Reuters 3000 Xtra users can click on the Czech StatisticalBureau's website:
- For LIVE Czech economic data releases, click on
- Instant Views on other Czech data
- Overview of Czech macroeconomic indicators
- Key data releases in central Europe
- For Czech money markets data click on
- Czech money guide
- Czech benchmark state bond prices
- Czech forward money market rates
(Reporting by Mirka Krufova and Jana Mlcochova. Editing byJeremy Gaunt.)
Keywords: CZECH INFLATION/