November’s bank board meeting was a surprisingly calm event (as all board members raised their hands for a 25bp hike) despite hawkish comments from some members before the meeting who suggested they would vote for a 50bp hike. Also, the forecast released in November had an unexpectedly dovish message. As the economy developed almost exactly in line with the forecast, we believe the bank board will stay on hold, in line with the recent staff prognosis. Yet, some of board members might consider monetary conditions too loose due to the weaker koruna. We thus expect the board to be split, and our call for no hike is a close one. 

The share of unemployed broke another record in November, when it dropped to its lowest level at 3.5%. The number of vacancies did not lag behind, surpassing October’s maximum. Therefore, finding a suitable work force is increasingly difficult for companies. However, given the negative seasonal factors, we expect the share of the unemployed will rise again from December.