PRAGUE, Oct 9 (Reuters) - Czech consumer prices dipped by 0.1 percent in September versus a month earlier, bringing annual inflation to 3.4 percent, statistics office data showed on Tuesday.
Both the monthly result and the annual rate were exactly in line 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, but above the bank's target range of 2 percent plus/minus one percentage point.
The statistics office said the data was influenced by a drop in prices in the sector of recreation and culture, while prices in transportation, clothing and footwear rose. **************************************************************** KEY POINTS: CONSUMER INFLATION (pct change) Sept Aug Sept fcast month/month -0.1 -0.1 -0.1 year/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 crude which led to an increase of fuel prices. However, this was compensated for by a drop in other parts, mainly a seasonal drop in prices of recreation.
"Core inflation remains moderately negative. There is no reason for the central bank to change its stance. It can maintain very loose monetary policy and if needed it can even use FX interventions."
- The monthly development was affected by a 13.2 percent drop in the 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 the price of eggs and cheese, a 1.5 percent drop in the price of yoghurts and a 5.6 percent decline in the price of butter. - On the contrary, prices in transportation grew, driven by a 2.6 percent monthly rise in fuel prices. - The year-on-year acceleration from August's 3.3 percent was mainly due to quickening in the rise of fuel prices to 9.6 percent in September from 6.5 percent in August.
- The central bank (CNB) cut the key two-week repo rate by 25 basis points to 0.25 percent
on September 27, 2012. - Report on last Czech c.bank rate decision......
- The central bank targets headline inflation, which it seeks to keep at 2 percent year-on-year, allowing for fluctuations by plus/minus one percentage point from this level. - The CNB's quarterly prediction sees consumer price inflation of 2.3 percent in the third quarter of 2013 and at 2.3 percent in the fourth quarter of 2013. - The central bank next meets on interest rates on November 1.
- For further details on September and other past inflation data, Reuters 3000 Xtra users can click on the Czech Statistical Bureau'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 by Jeremy Gaunt.)
Keywords: CZECH INFLATION/