The average wage in the Czech economy in the 2Q07 increased slightly, moving up by 7.4% to CZK 21,462. After taking into account the growth rate in consumer prices, real wage growth increased by 4.8%. Wages in the Czech economy are growing faster than in previous years and in relation to the dynamics of the economy, the wage growth rate is still conservative. This limits the pressures on inflation coming from labor costs and household demand. According to our estimates, unit wage costs in the 2Q07 significantly decreased while fears of an acceleration in labor costs above a safe growth rate has not yet been confirmed. The current data should support a scenario in which interest rates rise more slowly. In our opinion, we can expect the next Czech National Bank intervention in October.