Polish policymakers left interest rates unchanged this afternoon, but Governor Belka’s subsequent remarks that the MPC were “seriously” considering raising rates has triggered a sell-off in the bond market, particularly at the short end of the curve. We still see little to justify policy tightening at this juncture. But it’s difficult to escape the conclusion that a run of strong data over the coming weeks could prompt the MPC to raise rates within the next couple of months.
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