Turnover in retail sales slowed its pace of growth. It increased by 5.9% y/y in November, following an increase of 9.4% in October. Inflation, which rose to a 5% level in November again after six years in greater abeyance, may be starting to have its impact. Concerns related to the expected tax reforms and growing energy prices may also be having an impact on households.
Although retail sales grew more slowly than expected, the pace is fast enough to enable the CNB to increase interest rates in two-week's time, which is also supported by the current correction in the CZK exchange rate.