Polish MPC increasingly dovish, rate hikes unlikely this year

Governor Glapinski’s extremely dovish post-meeting press conference, coupled with the recent weak inflation data, has prompted us to take out the interest rate hikes from our forecast for this year. Even so, with price pressures likely to build over the coming quarters, we think that the tightening cycle will begin in early 2019 and still expect more rate hikes than are priced into markets by the end of next year.