Czech companies' inflation expectations jump in Q2 -central bank survey

PRAGUE (Reuters) - Czech companies' inflation expectations climbed to fresh highs in the second quarter, a central bank survey showed, challenging pledges of interest rate stability from the new governor.

Headline inflation hit 17.2% in June, according to statistics office data published on Wednesday, reaching its highest since 1993. In the past 12 months, inflation has averaged 9.4%.

Analysts say inflation may not peak until later this year, while companies, according to the Czech National Bank's latest quarterly statistical survey, also see continued price pressures.

In the survey, published on the central bank's website, company managers see inflation at 9.4% in a one-year horizon, up from a forecast of 7.1% a quarter ago. Inflation expectations in a three-year horizon were at 7.1%, up from 5.9%.

The survey data comes ahead of an Aug. 4 policy meeting at which the revamped central bank board will sit for the first time, led by Governor Ales Michl, who as a board member opposed interest rate hikes taken in the past year. He took the helm of the bank on July 1.

The central bank has lifted its key interest rate by 675 basis points, to 7.00%, since June 2021, seeking to anchor inflation expectations.

With Michl taking over the seven-seat board and three new board members joining this month, many analysts expect the rate tightening cycle to end. But markets still price in chances of another hike and some economists say more tightening is warranted.

** For an interactive graphic: https://tmsnrt.rs/3MG3SCf

(Graphic: Czech companies' inflation expectations soar, https://graphics.reuters.com/CZECH-CENBANK/zjpqkmemgpx/chart.png)

(Reporting by Jason Hovet; Editing by Alison Williams)