While it was expected that inflation takes time off before a further rise in January, the expectations did not materialize and it kept climbing by several decimal points in December. The consumer price index in December increased by 0.5 per cent. Growing food and fuel prices were the main contributors. Y/y inflation was up from 5.0 in November to 5.4 and reached its 6-year maximum. With the inflation growing beyond expectations, the chances are that the CNB will tighten its monetary policy and will make loans dearer as early as at the beginning of February. These expectations are already fully reflected in PRIBOR and FRA rates. The growing likelihood of CNB bringing the interest rates up contributes to the strengthening of the local currency. This morning, it went up by another CZK 0.05 to approach the level of CZK/EUR 26.0.