• Rate decision due Feb 5 at 2:30 p.m. (1330 GMT)
• Bank to comment on the decision at 3 p.m.
• All 16 analysts see main rate on hold at 3.50%
• Median forecast sees rate at 3.50 % at end-2026 (pvs 3.50%)
• Some analysts say a rate cut this year is possible

PRAGUE, Jan 29 (Reuters) - The Czech National Bank (CNB) is likely to hold interest rates steady when it meets next week and may do so throughout 2026, a Reuters poll of analysts showed on Thursday, but the chances of more policy easing are growing.

The central bank has been on hold since last cutting interest rates in May and has halved its main rate (CZCBIR=ECI) , opens new tab to 3.50% in an easing cycle that started in 2023.

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While inflation is around a 2% target, policymakers have been wary of elevated services price growth and rising wages.

At its last meeting in December, though, the board shifted its view of risks to meeting inflation targets to neutral, from inflationary.

Inflation also ended 2025 below expectations and is likely to fall below target after a new populist government took measures to cut energy bills.

Central bank Vice-Governor Jan Frait told Reuters this week that the bank could discuss slight monetary easing at its February 5 policy meeting due to external factors that may lead large central banks to cut rates.

In the poll, all 16 analysts forecast the bank to stay on hold next week, while the median forecast still saw unchanged rates this year.

But of those giving an outlook, at least five saw a cut coming as soon as the second quarter - after no forecasts for any move in the last poll. Some who predicted stability said a lowering may be possible.

"Given the change in the CNB's communication, a cut cannot be ruled out this year," Komercni Banka analysts said in a report on Thursday.

But its base case remained stability this year: "In addition to... anticipated fiscal expansion, the unexpectedly strong economy is another reason why the CNB is unlikely to cut rates."

LOWER INFLATION RISKS

Markets began pricing in chances of lower rates after December inflation stayed at 2.1% year-on-year.

Policymakers will be watching developments in services prices - which have been rising almost 5% - at the start of the year, when companies revise price lists.

Central bank board member Jan Prochazka said in a Bloomberg interview on Wednesday he was inclined to wait for more data before another cut.

Central bankers usually look past the direct impact of regulatory price changes, like in energy, but ING economist David Havrlant said lower utility bills would seep into other areas, and that disinflationary pressures would leave the real interest rate too restrictive.

For Adam Ruschka, a J&T Banka economist who forecast a cut in the second quarter, January inflation due out on the morning of the board meeting could already prompt a move next week.

"Otherwise, they will try to hold (rates), but as low inflation numbers will come, the pressure (to lower rates) will be too big," he said.

https://www.reuters.com/business/czech-rates-likely-stay-hold-next-week-debate-over-cut-starts-2026-01-29/