Inflation is losing steam – CPI decreased by 0.1 percent in August and y/y inflation dropped to 6.5 percent from 6.9 percent in July. From its peak at the beginning of the year, the inflation has already come down by 1 percentage point. This year, rising prices became one of the main problems of the Czech economy as they had significantly curbed the real wage growth. Moreover, the inflation brought on a risk of increased inflation expectations and higher wage demands. Thus the slow-down of inflationary fever – originally caused by a combination of tax changes and surging oil and food prices – is a welcome relief for both households and the central bank.