Political deadlock in Israel, CEE tightening in focus

Israel’s election this week delivered no clear winner. While political uncertainty won’t have much bearing on the country’s security strategy or near-term economic outlook, it makes it less likely that reforms to improve longer-term growth prospects will be pushed through. Elsewhere, we think the case for the Czech National Bank to hike rates (by 25bp to 4.00%) on Thursday is strong. But the Polish National Bank will see a case for keeping rates unchanged when it meets on Wednesday, postponing tightening into next year.