The decision this week by Poland's Constitutional Court to rule that some EU laws are in conflict with the Polish Constitution has sent shockwaves through Europe and raises the possibility that the release of some of Poland's share of the EU Recovery Fund will be delayed. Meanwhile, Poland and Romania joined the monetary tightening club this week and we think that further rate hikes will be delivered to tame inflation. But vague communications from Poland's central bank suggest that its tightening cycle may be slower than we had thought likely. Finally, more news this week about the disruption to auto production in Central Europe means that the recovery will probably struggle in Q4.
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