Poland’s consumer prices unexpectedly stabilized at 25-year high in July, boosting the chances that the central bank may soon pause, or even halt interest-rate increases.
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(Bloomberg) — Poland’s consumer prices unexpectedly stabilized at 25-year high in July, boosting the chances that the central bank may soon pause, or even halt interest-rate increases.
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Consumer prices rose 15.5% from the previous year, staying at the rate recorded in June, according to data released Friday. The reading was slightly below the median estimate of 15.6% in a Bloomberg survey of economists. Prices rose 0.4% from a previous month.
The report is likely to feed expectations that policy makers are close to wrapping up their monetary-tightening campaign after the economy began to show early signs of slowing following 10 consecutive monthly rate increases.
Some caution, though, that inflation may still accelerate on the back of surging energy prices. “It’s too early to pop champagne,” economists at ING Bank wrote on Twitter. The government has signaled it plans to extend its tax reductions on food and fuels beyond October in order to keep inflation in check.
While most economists still expect another hike in September, the expectations are starting to shift and are no longer unanimous. Four of 21 analysts surveyed by Bloomberg predict that rates have already peaked, 13 see another half a percentage point increase in September.
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