Fuel prices and imputed rent increase inflation slightly in July
The CNB comments on the July 2026 inflation figures
As expected, annual inflation rose to 1.7% in July from 1.5% in June. This was due mainly to higher fuel prices and faster growth in the cost of owner-occupied housing (imputed rent).
The overall inflation picture has changed little in recent months. Volatile fuel and food prices continue to have a significant impact on headline inflation. Both the increase in oil prices and the return of the excise duty on diesel to its original level were reflected in fuel prices in July, which were almost 17% higher year on year overall (15% year on year in June). By contrast, the subdued trend in food prices continued, with prices on average 3.1% lower year on year (–3.4% in June). The decline in food prices is relatively across-the-board and exceptional. Prices of some dairy products have fallen to their lowest levels in 15 years. However, commodity exchanges point to a turnaround, and this year’s poor harvest may also have an impact. Food prices should thus gradually cease to dampen inflation and, from late 2026/early 2027, start contributing to higher inflation instead. In addition, the start of the summer season in July also brought the usual increase in package holiday prices.
Core inflation increased by 0.2 percentage point to 3.0% in July, the highest level in the past year. However, this was not a change in trend, as core inflation had been within a narrow range of 2.8–2.9% in previous months. Higher growth in the cost of owner-occupied housing (imputed rent) was recorded in July, accelerating to 5.7% (from 5.2% in June) as a result of rising prices of new property as well as higher construction work prices. This was reflected in a 0.1 percentage point increase in year-on-year services inflation to 4.6%. Goods inflation remained unchanged at 0.4%.
We continue to expect headline inflation to be close to 2% for the rest of this year, although it will accelerate gradually. By contrast, core inflation will remain elevated in the coming months. Subsequently, core inflation and global inflation pressures (energy, food) are still arguments for increased caution in monetary policy.
Petr Sklenář, Executive Director of the Monetary Department
Fuel prices and imputed rent increase inflation slightly in July
The CNB comments on the July 2026 inflation figures
As expected, annual inflation rose to 1.7% in July from 1.5% in June. This was due mainly to higher fuel prices and faster growth in the cost of owner-occupied housing (imputed rent).
The overall inflation picture has changed little in recent months. Volatile fuel and food prices continue to have a significant impact on headline inflation. Both the increase in oil prices and the return of the excise duty on diesel to its original level were reflected in fuel prices in July, which were almost 17% higher year on year overall (15% year on year in June). By contrast, the subdued trend in food prices continued, with prices on average 3.1% lower year on year (–3.4% in June). The decline in food prices is relatively across-the-board and exceptional. Prices of some dairy products have fallen to their lowest levels in 15 years. However, commodity exchanges point to a turnaround, and this year’s poor harvest may also have an impact. Food prices should thus gradually cease to dampen inflation and, from late 2026/early 2027, start contributing to higher inflation instead. In addition, the start of the summer season in July also brought the usual increase in package holiday prices.
Core inflation increased by 0.2 percentage point to 3.0% in July, the highest level in the past year. However, this was not a change in trend, as core inflation had been within a narrow range of 2.8–2.9% in previous months. Higher growth in the cost of owner-occupied housing (imputed rent) was recorded in July, accelerating to 5.7% (from 5.2% in June) as a result of rising prices of new property as well as higher construction work prices. This was reflected in a 0.1 percentage point increase in year-on-year services inflation to 4.6%. Goods inflation remained unchanged at 0.4%.
We continue to expect headline inflation to be close to 2% for the rest of this year, although it will accelerate gradually. By contrast, core inflation will remain elevated in the coming months. Subsequently, core inflation and global inflation pressures (energy, food) are still arguments for increased caution in monetary policy.
Petr Sklenář, Executive Director of the Monetary Department