Czech central bank hikes key interest rate

The Czech central bank said Thursday it had raised interest rates by 25 basis points, bringing the key market rate to 2.5 percent. The move comes hard on the heels of the Polish central bank's decision Wednesday to raise interest rates by 50 basis points, bringing that country's key rates to 6.5 percent. Both countries are concerned about rising inflationary pressures. Czech inflation in July stood at a year-on-year rate of 3.2 percent, slightly above the country's target of 3 percent. Interest rates have now been raised in the Czech Republic by 50 basis points in recent weeks from a record low of 2 percent. The interest rate move puts Czech interest rates half a percentage point above the European Central Bank's key interest rate of 2 percent.