The Czech central bank has moved to increase interest rates for the first time since 2008. At its meeting on Thursday the bank’s board decided to raise the two-week repo rate by 20 basis points to 0.25%. At the same time, it decided to increase the Lombard rate by 25 basis points to 0.50% and to keep the discount rate unchanged at 0.05%. The new interest rate levels come into effect on 4 August 2017. Interest rates are now the main tool for the central bank to adjust the economy after dropping the low crown policy in April.
The Czech central bank also upgraded its economic growth forecast for 2017 from 2.9 to 3.6 percent. It likewise upgraded next year’s forecast from 2.8 to 3.2 percent. Its growth forecast for 2019 is 3.1 percent.
The head of the Christian Democratic Party Pavel Bělobrádek has said he will resign if his party does worse in October’s general elections than it did four years ago. In 2013 the Christian Democrats received 6.7 percent of the vote, which got them a place in the ruling coalition. Bělobrádek told the weekly Euro that he was ready to take responsibility for a poor showing in the elections. The party is hoping to win between 7 and 9 percent of the vote in the upcoming elections. It recently backed out of an agreement to form a coalition with the Mayors and Independents, fearing that they would not win the necessary ten percent of the vote in order to get seats in the lower house.
The month of July has seen a significant fall in the number of bankruptcies, according to data released by the Czech Credit Bureau. Altogether 45 companies faced bankruptcy proceedings in July, which is the lowest number since 2008. Year-on-year the number of bankruptcies is down by 136. The most bankruptcies were registered among companies involved in business and trade, the construction industry and services.
Eleven people were injured in an accident involving three police vehicles and two passenger cars in Prague. The police vans carrying a special unit and riot police used to maintain order during football matches were on their way to Letná stadium ahead of Thursday’s match between Sparta Prague and Crvena Zvezda Belgrade. Of the eleven people injured, ten were reportedly police officers. None of the injuries were reported to be serious. The cause of the accident is being investigated.
Fire-crews were called to help clear the D35 highway on Thursday after a tank being transported came loose and rolled off a platform trailer. No one was hurt in the accident, but the highway was closed for over an hour. The cause of the accident, which happened on an uphill stretch of the road, is being investigated.
In football, there was mixed news for Czech clubs in qualifying for Europe’s Champions League. Slavia Prague lost 1:2 away against Belarus team Borisov after a 1:0 win at home a week earlier. They got through to the next round on the back of the away goal. Viktoria Plzeň though are out of the competition after a 1:4 thrashing at home against Romanian team FCSB. At 1:1 in the second half, Plzeň conceded three goals in eight minutes and eventually ended with 10 men on the pitch after sole scorer, Krmenčik was sent off.
Meteorologists have issued a storm warning for the eastern parts of the country where temperatures on Thursday could reach 37 degrees Celsius. Friday is expected to be another sweltering hot day with temperatures hitting 32 degrees around the country. The heatwave should end at the weekend with next week’s temperatures dropping to around 25 degrees Celsius.
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