PRAGUE, Oct 24 (Reuters) - Czech consumer confidence hit its highest level since just before the global coronavirus pandemic hit in 2020, according to the statistics office's October survey. Consumer sentiment has been gradually building this year as unemployment stays at one of the European Union's lowest levels and wages rebound after being crushed in real terms in the inflation surge of recent years. The statistics office survey showed consumer confidence reached 107.4 in October, up 3.9 points over September and the highest level since February 2020. Business sentiment also rose. DECLINE IN PRICE EXPECTATIONS The survey showed households more optimistic about their financial situation and with fewer concerns over the overall economic situation, said Anastasija Neradova of the statistics office's business cycle department. Radomir Jac, chief economist for Generali Investments CEE, said the data also showed a decline in price expectations, which should be good news for the outlook for inflation, which has been in the upper part of the central bank's tolerance band. The Czech National Bank has cited rising wages, which are contributing to more household spending, as one of its inflationary risks as it has kept policy tight since last cutting interest rates in May. The bank has halved its main rate to 3.50% - from a decades-old high of 7.00% - in an easing cycle it started at the end of 2023. Banka Creditas chief economist Petr Dufek said a post-election bounce may also be behind the better sentiment, and that might fade in the coming months. The populist ANO party, led by billionaire former Prime Minister Andrej Babis, won an election this month with promises to raise wages and fire up economic growth. It is seeking to form a coalition and take office in the coming weeks. "Despite the optimism, consumers are not rushing to make large purchases this time," Dufek said. (Reporting by Jason Hovet; Editing by Alex Richardson) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
