Czechia In Brief: First Electoral Test and Interest Rate Outlook

CZECHIA - In Brief 12 Oct 2026 by Jan Hagemejer

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by Artur Radziwiłł and Jan Hagemejer Czechs voted on 9 and 10 October in municipal elections and the first round of the Senate renewal, the first electoral test since the new coalition took office and eight days after the Chamber rejected the opposition's no-confidence motion on 1 October with no coalition defections. Our initial report of 1 October asked whether the political noise mattered and whether the October elections would change anything. Ten days on, the results confirm that the coalition and its partners are still losing support, which makes an ambitious fiscal consolidation less likely. Together with the higher September inflation print, this reinforces our call that the CNB will raise rates by 25 basis points on 5 November. Opposition keeps its veto power in the Senate The opposition's Senate majority was secure by Saturday evening, before a single run-off was held. It needed only two of the 27 contested seats. Five seats were settled in the first round, four of them opposition, which closed the question, while 22 districts go to run-offs on 16 and 17 October, where ANO is in 13 and leads in only one, the seat it is defending. That opposition majority will therefore continue to prevent Babiš from pushing through constitutional amendments, changes to electoral law and Constitutional Court appointments, which all need Senate consent and cannot be overridden by the lower chamber as ordinary bills can. The coalition lost ground, and SPD collapsed in municipal elections ANO shed 39 council seats across the thirteen regional capitals and now leads in six of them against eight in 2022. In Prague it took 14.5 percent against more than 19 percent in 2022, finishing...