Czech central bank raises key rate to 5% to tame inflation

PRAGUE (AP) — The Czech Republic’s central bank has again raised its key interest rate in an effort to tackle soaring inflation.

Thursday's hike of half a point to 5% was the seventh straight increase since June, and had been expected by analysts

The bank, which considers high consumer prices a major threat, also had indicated it would raise the rate. It is now at its highest level since 2001.

The bank expects inflation might increase further in the course of 2022 due to Russia's invasion of Ukraine.

Fed by high energy prices, inflation jumped to 11.1% in February. That’s well above the bank’s 2% target.

The bank’s decision comes after the Statistics Office announced that the country’s economy grew by 3.3% last year — more than expected — after contracting by 5.8% the previous year due to the coronavirus pandemic.