(refiles, changing month in dateline)
* Inflation at nearly 6 year low
* Deflation unlikely thanks to weaker crown
* CPI data [ID:nL797796] Unemployment data [ID:nPRG003556]
By Jana Mlcochova
PRAGUE, Aug 10 (Reuters) - Czech consumer inflation
Separate data showed the economy continued shedding jobs in July, with the rate of unemployment rising to more than a three year high.
Prices dipped by 0.4 percent in July from June, putting the annual inflation rate at 0.3 percent, the lowest level since September 2003.
Both the annual and the monthly reading came in much lower than expected with analysts predicting 0.6 percent and -0.1 percent respectively.
Inflation was far below the central bank's 2009 target of 3 percent +/- 1 percentage point reflecting a steep drop in the economy which saw a worst ever contraction of 3.4 percent in the third quarter.
Faltering demand for the country's products from the West crippled exports, the backbone of the fast growth in past years.
"The prospects are ripe for Czech inflation to dip into outright negative over the coming months. Such a development would likely trigger one last rate cut from the CNB over the coming quarter before its easing cycle is finished," said Tatha Ghose, an analyst at Commerzbank.
But some said the lower than expected numbers are unlikely to elicit another rate reduction as rates were already very low and the drop in prices was driven by a decline in food prices which are not affected by monetary policy moves.
"I think that now there is no space for further rate cuts because we can see more and more positive surprises in the world economy," said David Marek, a chief economist at Patria Finance.
Most analysts said the economy was not threatened with deflation or a protracted drop in prices thanks to a weaker exchange rate from a year ago, although they could not rule out prices would keep falling for the next few months.
The crown
The unit has weakened by 5.7 percent since the beginning of August last year.
A separate set of data showed the July unemployment rate rose in line with expectations to 8.4 percent, the highest level since March 2009, and analysts said the rate could peak at 10 percent in the beginning of the next year as it reacts to the first signs of an economic recovery with a delay.
The total number of unemployed in July rose by 21,764 from 485,319 in June. Year-on-year the number rose by 175,261, the Labour and Social Affairs Ministry said.