Actual (Oct): 1.5 % y/y Consensus: 1.3 % y/y Previous (Sep): 0.0 % y/y The retail sales data have not brought any major surprise. The growth is in line with estimates. It was mainly driven by sales of cars (+8.5 % y/y) that had already been indicated by strong car registrations. Also sales of computers and telecommunication equipment show a good growth. On the other side we can see a decrease in sales of food (-2.7 %) and fuels (-4.5 %). The October figures do not change our view on consumer demand. It remains weak due to elevated unemployment and a very low growth of real wages. Moreover, the worsening economic outlook weighs on the consumer sentiment and holds back spending. The economy is expected to only stagnate or even slightly decrease in 2012. Furthermore, a VAT hike is in the pipeline and further fiscal tightening will likely come early next year. Therefore, we expect retail sales to stagnate or to decrease slightly in months to come. We do not see any big impact of the retail sales data on interest rates. Currently, the most important factor is the FX rate because of the koruna´s higher volatility. We stick to our projection of stable rates.