Polish central bank governor shifts emphasis to growth

Following the surprise decision to leave interest rates on hold today, when most had expected a 25bp cut, Governor Belka didn’t close the door on further easing. But he did shift the emphasis onto growth, rather than inflation, as the trigger for a change in stance. With this coming against the backdrop of improving activity and survey data, it would seem that further rate cuts are now unlikely. Accordingly, we think the policy rate will remain unchanged at 2.00% throughout both this year and next.