Food and fuel prices push inflation down to 1.5% in June
The CNB comments on the June 2026 inflation figures
In June, annual inflation unexpectedly fell sharply to 1.5% from 2.1% in May. This represented a further correction of the previous trend, with inflation returning to the levels observed at the start of the year, before the outbreak of the conflict in the Middle East. However, the structure of inflation was somewhat different in June.
Volatile fuel and food prices have had a major impact on headline inflation in recent months. The sharp increase in fuel prices in March and April raised inflation by almost 1 percentage point. The subsequent partial correction in fuel prices, combined with the steep decline in food prices in May and June, has at first glance offset the previous increase in inflation. Fuel prices have gradually erased around one-third of the initial increase, but in June they were still one-fifth higher than in February. At the same time, food prices have been subdued since the start of the year, with this trend becoming even more pronounced in recent months. In June, food prices fell by an exceptional 1.3% month on month and were 3.4% lower in year-on-year terms, the steepest decline in the past two years. Food prices thus reduced headline inflation by 0.6 percentage point in June. However, a gradual turnaround in this segment is expected in the months ahead. With the exception of volatile items, price developments saw minimal changes and broadly followed the previous trend.
Core inflation slowed by 0.1 percentage point to 2.8% in June following three months at 2.9%. This reflected a slight slowdown in services inflation within core inflation, by 0.1 percentage point to 4.5% year on year. Within services, the closely monitored cost of owner-occupied housing (imputed rent) slowed to 5.2% year on year in June (from 5.3% in May). By contrast, growth in goods prices accelerated slightly in June (from 0.3% to 0.4% year on year). Despite the slight slowdown, services inflation, and hence core inflation, remains elevated.
We expect headline inflation to be close to 2% in the second half of this year, or rather slightly above this level at the end of the year. The latest slowdown in inflation is due to volatile items, whose future evolution cannot be relied upon. By contrast, the elevated core inflation and the increase in global inflation pressures are still reasons for increased caution.
Petr Sklenář, Executive Director of the Monetary Department
Food and fuel prices push inflation down to 1.5% in June
The CNB comments on the June 2026 inflation figures
In June, annual inflation unexpectedly fell sharply to 1.5% from 2.1% in May. This represented a further correction of the previous trend, with inflation returning to the levels observed at the start of the year, before the outbreak of the conflict in the Middle East. However, the structure of inflation was somewhat different in June.
Volatile fuel and food prices have had a major impact on headline inflation in recent months. The sharp increase in fuel prices in March and April raised inflation by almost 1 percentage point. The subsequent partial correction in fuel prices, combined with the steep decline in food prices in May and June, has at first glance offset the previous increase in inflation. Fuel prices have gradually erased around one-third of the initial increase, but in June they were still one-fifth higher than in February. At the same time, food prices have been subdued since the start of the year, with this trend becoming even more pronounced in recent months. In June, food prices fell by an exceptional 1.3% month on month and were 3.4% lower in year-on-year terms, the steepest decline in the past two years. Food prices thus reduced headline inflation by 0.6 percentage point in June. However, a gradual turnaround in this segment is expected in the months ahead. With the exception of volatile items, price developments saw minimal changes and broadly followed the previous trend.
Core inflation slowed by 0.1 percentage point to 2.8% in June following three months at 2.9%. This reflected a slight slowdown in services inflation within core inflation, by 0.1 percentage point to 4.5% year on year. Within services, the closely monitored cost of owner-occupied housing (imputed rent) slowed to 5.2% year on year in June (from 5.3% in May). By contrast, growth in goods prices accelerated slightly in June (from 0.3% to 0.4% year on year). Despite the slight slowdown, services inflation, and hence core inflation, remains elevated.
We expect headline inflation to be close to 2% in the second half of this year, or rather slightly above this level at the end of the year. The latest slowdown in inflation is due to volatile items, whose future evolution cannot be relied upon. By contrast, the elevated core inflation and the increase in global inflation pressures are still reasons for increased caution.
Petr Sklenář, Executive Director of the Monetary Department