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Poland raises rates to 14-year high as central bank battles inflation

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WARSAW (Reuters) -Poland’s central bank raised its main interest rate by 75 basis points to 6.00% on Wednesday, delivering a hike in line with analysts’ estimates as it battles inflation rising to levels unseen since the 1990s.

Russia’s Feb. 24 invasion of Ukraine poses a dual threat to central European economies, on the one hand fuelling price growth by disrupting global supply chains and commodity markets while on the other creating the risk of slowing growth as business confidence falters.

“We think a backdrop of tight labour market conditions and surging inflation will prompt further large hikes at the upcoming meetings,” said Liam Peach, Emerging Europe Economist at Capital Economics.

Central bankers in Hungary and the Czech Republic have signalled that growth risks mean they will slow the pace of policy tightening.

In May, the National Bank of Hungary (NBH) raised its main interest rate by only 50 basis points, half the pace of rate rises in recent months.

Of 20 analysts polled by Reuters ahead of Wednesday’s decision in Poland, 15 forecast a 75-basis-point hike, four expected 50 basis points and one saw a 100-basis-point increase.

A statement following the decision will be published at 1400 GMT.

Polish central bank raises main interest rate to 6.00%

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