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Central Europe: central banks to shrug off high inflation

The recent rise in inflation to multi-year highs across most of Central Europe has only a little further to run, but it will stay above central banks’ targets across the region this year. Policymakers will probably look through this and keep interest rates on hold. In fact, we think that the Czech Republic will shift towards easing later this year as the MPC responds to falling core inflation and weak economic growth.

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