The consumers price index increased in January by 3.0% m/m and inflation jumped from December’s 5.4% to 7.5%. The inflation rate exceeded the worst expectations of the market and has reached its highest number since November 1998. The change in the lower VAT rate was translated unexpectedly fast in terms inflation in food prices. Besides higher prices for food, oil and energy were added changes in regulated prices, the tax reforms, medical payments, rapid economic growth and decreases in the unemployment rate. This surprise could change our previously published prognosis of the CNB's intentions – any lowering of interest rates may be postponed by a couple of months.