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CNB board meeting minutes show concern over inflationary pressure

Minutes from the Czech National Bank board meeting of June 27 – when policymakers raised the main interest rate by a quarter point to 1 per cent – show growing concern over inflationary pressures stemming from the tightening labour market and corresponding high wage growth.

The jobless rate dropped to 2.9 per cent in June, the lowest in the EU. In the first quarter of 2018, Czech average wages rose by 8.6 per cent, also outpacing the EU average.

The Czech annual inflation rate rose to an eight-month high of 2.6 per cent in June from 2.2 per cent in May, widening the gap between the rate and the central bank’s 2 per cent target.

Rising foreign producer prices, including commodities, pose an inflationary risk in the short term while global uncertainty associated with the impact of Brexit could have an anti-inflationary effect in the longer run, the CNB said.

Ambassador: NATO regards Czech defence spending commitment as credible

NATO regards a Czech commitment to increase defence spending to 2 percent of GDP by the year 2024 as credible, according to the Czech ambassador to the alliance, Jiří Šedivý. In an interview with Czech Television after US President Donald Trump called on Europe to boost its outlay on its defence, Mr. Šedivý said the Czech Republic was neither among the best or the worst as regards weapons purchases.

This was borne out by the fact that it was not among those countries to receive a letter from Mr. Trump calling on them to contribute more to collective defence, the Czech official said.

Chovanec ready to quit as MP after refusing to back own party in confidence vote

Social Democrat MP Milan Chovanec says he is ready to give up his seat in the lower house if the party’s deputies group expels him over his failure to back the government. The former interior minister did not show up on Wednesday for a vote of confidence in a coalition government comprising his party and ANO. He said he could not raise his hand for the alliance for reasons of conscience.

In an interview with Friday’s edition of the newspaper Právo, Mr. Chovanec said he had not wished to go against the Social Democrats’ party base but could not take any more.

He said more store should have been set in the party’s pre-election pledges not to enter government with ANO leader Andrej Babiš. Mr. Babiš is facing criminal charges over alleged fraud.

Report: Two-thirds of Czechs distrust news media, Russia-backed sources a factor

Only 31 per cent of Czech citizens trust the news media, according to a new report by the Reuters Institute for Journalism Studies at Oxford University, based on a YouGov survey of over 74,000 online news consumers in 37 countries.

The Digital News Report cites rising political polarisation and the spread of ‘fake news’ and disinformation online as major factors contributing to the low level of trust among Czechs. It further noted growing concern over sites linked to Russian-based sources or funders promoting an anti-EU agenda.

The report found that Czechs also believe there is less editorial autonomy among mainstream news media, most of which are controlled by oligarchs, such as Prime Minister Andrej Babiš, and powerful business groups.

The five most trusted media are public broadcaster ČT24 and the Czech Radio station Radiožurnál, followed by business daily Hospodářské noviny, and commercial sites Seznam.cz and Aktualne.cz.

Prague-listed soft drinks maker Kofola to halve registered capital

Drinks maker Kofola Ceskoslovensko has announced plans to cut its registered capital 2.23 billion crowns by roughly 50 per cent, subject to approval at a general shareholders meeting on August 13.

The aim is to optimise Kofola’s equity structure and ensure regular dividends for investors even in the event of potential revaluation adjustments of its Polish subsidiary HOOP Polska in the company’s accounts.

Kofola is controlled by the Greek-Czech Samaras family, who resurrected the cola brand Kofola in the 1990s. The drinks maker has since expanded throughout Central Europe but has struggled to gain a stronghold in Poland.

Weather outlook

Grey skies are going to clear up on Saturday – at least in the northwest of the country. But light rain is expected in southern Bohemia and Moravia. Daytime temperatures should be between 24 and 28 degrees Celsius.