A deeper decline in food prices affects inflation in October
The CNB comments on the October 2026 inflation figures
Annual inflation fell by 0.1 percentage point to 2.4% in October, as expected. Several factors affected the final figure, the most important being a deeper year-on-year decline in food prices. Fuel prices also underwent a correction owing to the reduction in excise duty on diesel.
Despite a number of adverse factors, food price inflation has remained subdued this year. In October, the year-on-year decline in prices of food and non-alcoholic beverages deepened to -4.0% from -3.5% in September. The decline in food prices remains relatively broad-based, and food prices are, on average, at a two-year low. The turnaround indicated by commodity markets and reports of this year’s poor harvest has therefore yet to materialise.
Excluding volatile food and fuel prices, the underlying inflation trend has changed little in recent months. Despite fluctuations in headline inflation, core inflation has remained stable, staying unchanged at 3.1% in October. A further slowdown in growth in the cost of owner-occupied housing (imputed rent), from 5.1% year on year in September to an 18-month low of 4.6%, was a positive surprise. Despite this, services price inflation remained stable at an elevated 4.5% year on year. By contrast, goods price inflation accelerated slightly again to 1.0%, its highest level since the start of 2024. One factor is the gradual increase in electronics prices due to the global chip shortage.
Inflation will probably rise to close to 3% by the end of the year, driven mainly by food prices. At the start of next year, headline inflation is likely to jump temporarily to well above 3% as the administrative effect of the full transfer of the supported energy sources fee to the state budget fades. Inflation is expected to peak in February and then start to slow. Core inflation should remain stable in the coming months, albeit at a still elevated level of around 3%.
The elevated inflation outlook for next year, reflecting the evolution of core inflation and global inflation pressures (energy, food), provides grounds for increased caution in monetary policy.
Petr Sklenář, Executive Director of the Monetary Department
A deeper decline in food prices affects inflation in October
The CNB comments on the October 2026 inflation figures
Annual inflation fell by 0.1 percentage point to 2.4% in October, as expected. Several factors affected the final figure, the most important being a deeper year-on-year decline in food prices. Fuel prices also underwent a correction owing to the reduction in excise duty on diesel.
Despite a number of adverse factors, food price inflation has remained subdued this year. In October, the year-on-year decline in prices of food and non-alcoholic beverages deepened to -4.0% from -3.5% in September. The decline in food prices remains relatively broad-based, and food prices are, on average, at a two-year low. The turnaround indicated by commodity markets and reports of this year’s poor harvest has therefore yet to materialise.
Excluding volatile food and fuel prices, the underlying inflation trend has changed little in recent months. Despite fluctuations in headline inflation, core inflation has remained stable, staying unchanged at 3.1% in October. A further slowdown in growth in the cost of owner-occupied housing (imputed rent), from 5.1% year on year in September to an 18-month low of 4.6%, was a positive surprise. Despite this, services price inflation remained stable at an elevated 4.5% year on year. By contrast, goods price inflation accelerated slightly again to 1.0%, its highest level since the start of 2024. One factor is the gradual increase in electronics prices due to the global chip shortage.
Inflation will probably rise to close to 3% by the end of the year, driven mainly by food prices. At the start of next year, headline inflation is likely to jump temporarily to well above 3% as the administrative effect of the full transfer of the supported energy sources fee to the state budget fades. Inflation is expected to peak in February and then start to slow. Core inflation should remain stable in the coming months, albeit at a still elevated level of around 3%.
The elevated inflation outlook for next year, reflecting the evolution of core inflation and global inflation pressures (energy, food), provides grounds for increased caution in monetary policy.
Petr Sklenář, Executive Director of the Monetary Department