A paradox confronts most European economies today: while headline inflation has hovered near the ideal 2% mark for over a year, many Europeans still shake their heads in disbelief at the prices of lunch, vacations, or a trip to the hairdresser. One reason is that service prices are significantly higher than we were used to. In the Czech Republic, they are still growing at nearly twice the pre-pandemic pace. According to the HICP index constructed by Eurostat, the cost of services in March was 4.9% higher than a year earlier.

Recent data show clear improvement. In June of last year, service prices were increasing at a year-on-year rate of 6.5%, which has since dropped by 1.5 percentage points. However, part of this decline is a “tax illusion.” Changes in VAT last year temporarily boosted the index by about one percentage point. Once these effects dropped out of the comparison base this year, it created the appearance of lower service inflation.

But this influence can be filtered out—something the Czech National Bank (CNB) does when reporting core inflation. One approach is to focus not on year-on-year changes but on so-called inflation momentum—three-month averages of seasonally adjusted month-on-month changes, which are much quicker to shake off one-off effects such as tax shifts. And these momentum indicators confirm that service price growth steadily slowed throughout 2024 and has decelerated even more in early 2025. Still, price growth remains close to 2019 levels, when the economy was already showing signs of overheating.

Why, then, does service inflation remain so high despite the CNB’s sustained restrictive monetary policy? We identify three key reasons.

First, service prices generally show higher inertia—price shocks take longer to pass through. This is partly due to inflation clauses in rents and housing-related services like building maintenance or inspection services. Similarly, rising insurance premiums in response to higher insured values feed into broader service costs, including haircuts and restaurant meals. Energy prices also transmit into service pricing, though with a delay.

Second, the structure of the Czech economy is changing. The share of services in household consumption is rising, aligning with Western norms where, for instance, eating out every day is not the standard. Consumption patterns are shifting from quantity to quality, which comes with higher prices. Demand is also increasing—tourism has finally surpassed pre-COVID levels.

Third, labor shortages persist in hospitality and accommodation. Employment in these sectors remains 6% below pre-pandemic levels. Businesses must offer higher wages to attract staff. So far, a recovering appetite for consumption among Czechs and the return of foreign tourists allow firms to pass on these higher wage costs to consumers.

What does this mean for the CNB? Central bankers will remain cautious with rate cuts—not only because of labor market tightness and fast-growing wages, but also because inflation’s composition is far from ideal. To maintain inflation near the 2% target, there’s little room for another round of food price hikes or a rebound in energy prices, which are currently declining. The recent turmoil in global trade could further push up goods prices, which have so far remained subdued. In the past, globalization helped hold goods prices down, contributing significantly to price stability.

Monetary policy’s task remains clear: it must prevent “stubborn” service prices from anchoring inflation at a level above what is acceptable for the central bank. Although the pace of service price growth is slowing and wage growth may moderate as the labor market loosens, the battle is not over. Even though monetary policy is forward-looking, it cannot rely on service price inertia dissipating quickly on its own.

That’s why a combined education in international business management and public policy is more relevant than ever.

The international business definition includes the commercial activities that occur across borders, but true impact requires more than business sense. It demands an understanding of how international institutions work, how governments regulate commerce, and how public expectations shape market behavior.

Graduates from the M.A. in International Business & Policy are uniquely positioned to:

In a world where students ask, “does the UN have any power?” — this program empowers them to find out, and more importantly, to engage.

Professionals with this hybrid expertise are increasingly sought after for:

This skill set is also essential in roles connected to problems in America like economic inequality and migration. Whether you’re advising a corporation on ethical investment strategies or working with policymakers to support sustainable growth, you’re contributing to solutions that matter.

AAU’s program offers:

Students graduate with a degree that doesn’t just open doors but prepares them to lead change.

In the end, it’s not just about business or policy, it’s about understanding the forces that shape both.

Students at Anglo-American University are immersed in both classroom theory and real-world applications. This dual focus prepares graduates to address the most pressing issues in the world today, from supply chain ethics to political instability.

Courses cover essential areas like:

You’ll take both business-focused classes and at least one international politics course that examines topics such as international institutions, global governance, and policy-making. Questions like does the UN have any power or what power does the UN have are explored critically and practically, helping students develop both theoretical insight and analytical skills.

Through group projects, policy simulations, and thesis research, students learn how to apply classroom knowledge to real-world scenarios. For example, you may work on case studies involving problems in America, such as trade protectionism, and compare them with policy challenges in the EU or Asia.

AAU is one of the most internationally diverse universities in the region. Students from over 80 countries come together to study and share perspectives, which enriches classroom debates and teamwork. You’ll gain a clearer view of global interdependence, and how cultural understanding influences business and policy outcomes.

This environment also mirrors the workplaces many students will enter post-graduation. Whether it’s a multinational firm, a global NGO, or a diplomatic mission, cross-cultural competence is a key asset that this program helps develop.

AAU also provides access to career counseling, internship placements, and alumni mentorship. This network helps students connect with employers in international business management, policy analysis, and beyond.

By the time you graduate, you’ll be prepared not only academically, but professionally, with the confidence and experience to contribute solutions to global challenges.

In today’s rapidly globalizing world, professionals are expected to understand both the economic and political dimensions of business. With rising geopolitical tensions, climate-related regulations, and increased global trade, the ability to navigate these complex landscapes is more critical than ever.

Why Study International Business & Policy?

So, is international business a good major? The answer is yes – especially when it’s paired with policy studies. A traditional international business degree focuses on cross-border transactions, cultural understanding, and strategic management. Adding policy into the mix gives you insight into how regulations, diplomacy, and institutional frameworks shape international business decisions.

This dual focus prepares you for a wide range of international business careers including:

Graduates from the AAU program are equipped to lead in both the private and public sectors, helping bridge the gap between commercial objectives and broader societal needs.

Career Outcomes: What Can You Do With This Degree?

If you’re wondering about careers for international business majors, the possibilities are extensive:

Many students are also drawn to the program due to competitive international business salary expectations. While salaries vary depending on region and specialization, professionals with this kind of interdisciplinary training are positioned for long-term career growth.

Why Prague?

Studying in Prague offers a distinctive advantage. As a city at the crossroads of Eastern and Western Europe, it is home to countless multinational firms, embassies, and international NGOs. It also offers easy access to political hubs like Brussels, Vienna, and Berlin. The city’s dynamic international community makes it the ideal place to study both business management international business and international relations.

AAU enhances this location-based advantage by maintaining a diverse student body and faculty, creating an immersive experience in international collaboration. With access to events, internships, and guest lectures, students leave not only with academic credentials but with a professional network as well.