Poland leaves rates unchanged

Inflation in Poland fell in April to 4%, a figure above the central bank's target of 2.5%.

Much of this was due to factors beyond the central bank's control, it said. "The heightened inflation results, to a large extent, from factors that are beyond the influence of domestic monetary policy, particularly from strong increases in food and fuel prices in the world markets and from increases of administered prices."

Darkening prospects for economic growth however meant the central bank was adopting a "wait-and-see" approach: "In view of the persisting uncertainty as to the global growth outlook and the prospects of the Polish economy, the council assessed that a more comprehensive assessment of inflation outlook will be possible after analysing the data released in the near future and after considering the June inflation projection."

In the near term the central bank said it expected inflation pressures to remain:" Increased inflation in the months to come will, to a large extent, result from the growth of administered prices and also from the food and fuel price growth observed in the world economy and affecting the Polish market."

In the medium term, forces including productivity growth, globalisation and the previous rises in interest rates and the exchange rate should combine to curb this pressure, the central bank said.

Looking ahead, the rate-setting council admitted that inflation was more likely to remain above target than undershoot it in the medium term and it did not rule tightening policy in the future to bring it back to target.

The minutes from the meeting will be published on 19 June, in the week before the next scheduled meeting.