Inflation falls to 1.4% in February, the lowest since 2016
The CNB comments on the February 2026 inflation figures
In February, annual inflation declined by 0.2 pp to 1.4%, slightly below our forecast (1.6%). A key factor was a drop in food and alcohol prices, with headline inflation thus reaching its lowest level since October 2016.
A number of favourable factors related to energy and food prices have reduced inflation in recent months. At the start of the year, the abolition of the supported energy sources (SES) fee in electricity prices had a pronounced one-off effect. This was followed in February by an exceptional decline in food prices combined with a decrease in prices of alcoholic beverages. These items led to the decline in headline inflation. Food price inflation is now at its lowest level since autumn 2024. In the rest of the consumption basket, overall price movements were not significant.
Core inflation remained unchanged at 2.7% year on year in February. There was no major change in trend. Growth in goods prices remained subdued despite accelerating slightly from 0.1% to 0.3% year on year in February and offsetting the January slowdown. By contrast, services inflation remains elevated, although it slowed by 0.2 pp to 4.3% year on year in February. The closely monitored cost of owner-occupied housing (imputed rent) continued to grow at 5.1% year on year in February, the highest level in three years. Growth in market rents also remained elevated (6.1% year on year).
Thanks to favourable developments in energy and food prices, headline inflation dropped well below 2% at the start of this year. Inflation will be affected by an increase in oil prices in the months ahead, but it could still stay below 2%. Core inflation will remain elevated close to its current levels, due primarily to services prices.
Despite the very favourable developments in headline inflation, elevated core inflation and now also an increase in global cost pressures are reasons for a cautious monetary policy approach.
Petr Sklenář, Executive Director of the Monetary Department
Inflation falls to 1.4% in February, the lowest since 2016
The CNB comments on the February 2026 inflation figures
In February, annual inflation declined by 0.2 pp to 1.4%, slightly below our forecast (1.6%). A key factor was a drop in food and alcohol prices, with headline inflation thus reaching its lowest level since October 2016.
A number of favourable factors related to energy and food prices have reduced inflation in recent months. At the start of the year, the abolition of the supported energy sources (SES) fee in electricity prices had a pronounced one-off effect. This was followed in February by an exceptional decline in food prices combined with a decrease in prices of alcoholic beverages. These items led to the decline in headline inflation. Food price inflation is now at its lowest level since autumn 2024. In the rest of the consumption basket, overall price movements were not significant.
Core inflation remained unchanged at 2.7% year on year in February. There was no major change in trend. Growth in goods prices remained subdued despite accelerating slightly from 0.1% to 0.3% year on year in February and offsetting the January slowdown. By contrast, services inflation remains elevated, although it slowed by 0.2 pp to 4.3% year on year in February. The closely monitored cost of owner-occupied housing (imputed rent) continued to grow at 5.1% year on year in February, the highest level in three years. Growth in market rents also remained elevated (6.1% year on year).
Thanks to favourable developments in energy and food prices, headline inflation dropped well below 2% at the start of this year. Inflation will be affected by an increase in oil prices in the months ahead, but it could still stay below 2%. Core inflation will remain elevated close to its current levels, due primarily to services prices.
Despite the very favourable developments in headline inflation, elevated core inflation and now also an increase in global cost pressures are reasons for a cautious monetary policy approach.
Petr Sklenář, Executive Director of the Monetary Department