Inflation falls to 1.6% in January due to the supported energy sources fee
The CNB comments on the January 2026 inflation figures
As expected, annual inflation declined to 1.6% in January, down from 2.1% in December, fully in line with our forecast. The assumption that energy prices would have a very pronounced effect on inflation at the start of the year was confirmed, and headline inflation fell to its lowest level since November 2016.
The key factor was the abolition of the supported energy sources (SES) fee in electricity prices, with this administrative change reducing January inflation by 0.4 pp. Moreover, the commodity component of electricity prices also declined, and final electricity prices were thus 12.2% lower year on year in January. In addition, the favourable trend in food prices continued, with year-on-year food price growth slowing to 1.3% (from 1.7% in December), the slowest increase in food prices since November 2024.
At the start of each year, a broad range of price lists is traditionally adjusted, which explains the overall strong month-on-month increase of 0.9% in January compared with December. This year, similarly to last year, these price adjustments remained slightly above average.
There was no major change in trend except in the volatile items. Core inflation fell slightly in January by 0.1 pp to 2.7% year on year, partly offsetting the acceleration recorded in December. This mainly affected goods prices within core inflation, which slowed to 0.1% year on year from 0.4% in December. They probably still reflect the fading effect of the previous appreciation of the koruna. By contrast, services inflation remained elevated at 4.5% year on year in January. The closely monitored cost of owner-occupied housing (imputed rent) accelerated by 1 pp to 5.1% year on year, the highest level in three years. Growth in market rents also remains elevated (6.3% year on year).
Thanks to the favourable developments in energy prices, including the effect of the abolition of the SES fee, headline inflation declined well below 2%, where it is expected to stay for the rest of the year. At least at the start of the year, 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 is a reason for a cautious monetary policy approach. Persistently high services inflation shows that price developments in the domestic economy have not yet fully normalised.
Petr Sklenář, Executive Director of the Monetary Department
Inflation falls to 1.6% in January due to the supported energy sources fee
The CNB comments on the January 2026 inflation figures
As expected, annual inflation declined to 1.6% in January, down from 2.1% in December, fully in line with our forecast. The assumption that energy prices would have a very pronounced effect on inflation at the start of the year was confirmed, and headline inflation fell to its lowest level since November 2016.
The key factor was the abolition of the supported energy sources (SES) fee in electricity prices, with this administrative change reducing January inflation by 0.4 pp. Moreover, the commodity component of electricity prices also declined, and final electricity prices were thus 12.2% lower year on year in January. In addition, the favourable trend in food prices continued, with year-on-year food price growth slowing to 1.3% (from 1.7% in December), the slowest increase in food prices since November 2024.
At the start of each year, a broad range of price lists is traditionally adjusted, which explains the overall strong month-on-month increase of 0.9% in January compared with December. This year, similarly to last year, these price adjustments remained slightly above average.
There was no major change in trend except in the volatile items. Core inflation fell slightly in January by 0.1 pp to 2.7% year on year, partly offsetting the acceleration recorded in December. This mainly affected goods prices within core inflation, which slowed to 0.1% year on year from 0.4% in December. They probably still reflect the fading effect of the previous appreciation of the koruna. By contrast, services inflation remained elevated at 4.5% year on year in January. The closely monitored cost of owner-occupied housing (imputed rent) accelerated by 1 pp to 5.1% year on year, the highest level in three years. Growth in market rents also remains elevated (6.3% year on year).
Thanks to the favourable developments in energy prices, including the effect of the abolition of the SES fee, headline inflation declined well below 2%, where it is expected to stay for the rest of the year. At least at the start of the year, 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 is a reason for a cautious monetary policy approach. Persistently high services inflation shows that price developments in the domestic economy have not yet fully normalised.
Petr Sklenář, Executive Director of the Monetary Department