Poland's inflation is likely to return to the black at the end of this year

Softer deflation in Poland is mainly attributable to a statistical base effect and a slight increase in food and transport prices. It is expected that, the Polish Monetary Policy Council will remain in wait-and-see mode in the coming months, a position that was actually also confirmed by Governor Marek Belka at the press conference following the last monetary policy review meeting.

Governor Belka stated that "the likelihood of any changes to the interest rate level is low and that he doesn't expect the MPC to revert to an easing cycle. He also added that the markets are "largely right" in pricing in rate hikes in the second half of next year. It is believed that, there will be no changes to central bank rates until at least Q1 next year,notes Societe Generale.