The Czech National Bank held its two-week repo rate steady at 3.5% in June 2025, as expected, following a 25 basis points cut in May. The discount and Lombard rates also remained unchanged at 2.5% and 4.5%, respectively. The decision reflected a move to counter fresh increases in wages and inflation, with headline inflation rebounding to 2.4% in May from 1.8% in April, which the lowest level in over seven years. Services prices remain elevated, and property prices are contributing more to inflation amid a continued housing market recovery. Average wage growth reached 6.7% year-on-year in Q1 2025, remaining high by historical standards. Externally, weak European demand, global trade tensions, and geopolitical uncertainties - including the wars in Ukraine and the Middle East - added to the cautious outlook. Given these conditions, the Bank maintained a prudent stance to help anchor inflation near its 2% target.