Dovish Polish MPC suggests that tightening is long way off

The dovish stance taken by the Polish MPC in its post-meeting press conference reinforces our view that, despite the recent rise in inflation, monetary policy will remain loose over the next couple of years. We think the Council is likely to keep the policy interest rate at its record low of 1.50% throughout 2017-18. This is in contrast to the financial markets, which are pricing in 75bp of rate hikes over this period.