Consumer Price Index (CPI) decreased in December by 0.1% and inflation y/y moved to 2.2% from November’s 2.4%. Consumer prices usually increase in December. Last time it decreased in December was in 1998. Part of the reason were lower fuel prices and only 0.1% increase in food prices. Lower inflation than expected is probably a definitive confirmation of neutral politics of Czech National Bank (CNB) in the beginning of this year. Change in interest rates would be a big supprise. In the 1Q06 the inflation will rise to 3%, which should be this year’s peak and average inflation of 2.6% should not provide a reason to tighten the grips within the monetary politics dramatically.