As expected, the Czech National Bank left interest rates unchanged at today’s meeting. According to the Bank Board, the current degree of monetary policy restriction is sufficient. At the next meeting, the central bankers will decide whether to leave rates unchanged or raise them. Reducing core inflation was identified as the key objective. As domestic inflationary pressures are currently less pronounced than anticipated in the CNB’s latest forecast, we continue to expect the key repo rate to remain at its current level for an extended period, in line with that forecast. However, given the renewed rise in market prices for energy, there is a risk of further tightening of monetary conditions. Should energy commodity prices remain at elevated levels for longer, this would increase the risk of more pronounced secondary effects on inflation, as well as a rise in inflation expectations. Compared with the CNB’s August forecast, domestic fiscal policy will also be significantly more expansionary next year.