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Bloomberg
Polish inflation surged to its highest level in two decades, piling pressure on policy makers to ditch their dovish stance and increase interest rates in the coming months.
Consumer prices rise 5.4% from a year earlier in August, after a 5% increase in July, according to data. That exceeded the 5.1% median estimate in a Bloomberg survey.
The Monetary Policy Council rejected motions for 15 basis-point rate hikes in both June and July, saying inflation was being driven by reopening of economy after worst of pandemic and that price-growth triggers were beyond control of monetary policy. A majority of board members expects price growth to ease to around 3.5%, the upper end of their target range, next year.
Governor Adam Glapinski has ruled out raising rates unless strong and persistent economic growth is coupled with excessive demand-driven inflation. Before considering any action, majority of MPC wants to see inflation and GDP forecasts due in November.
Uncertainty about the future course of the pandemic and its impact on the economy supports keeping the benchmark rate steady at 0.1%, according to the minutes from the MPC’s last meeting in July.