September 29, 2017 / 10:35 AM / a year ago

Analysts expect next Polish rate hike in fourth quarter 2018: Reuters poll

WARSAW (Reuters) - Poland’s central bank is likely to keep interest rates on hold until it increases them in the fourth quarter of 2018, a Reuters poll found on Friday.

All 19 analysts polled this week expect the bank’s rate-setting Monetary Policy Council (MPC) to keep the benchmark rate at its all-time low of 1.50 percent at its meeting next Wednesday.

The median forecast was for no change until a 25 basis point hike in the fourth quarter of 2018, unchanged from last month’s poll.

Central bank Governor Adam Glapinski said in September that he would likely support rates remaining stable until the end of 2018 as an inflow of Ukrainian workers helps ease strains in the labour market, where unemployment has fallen to a record low.

Data for August published earlier this month showed the highest corporate sector wage growth in more than five years, at 6.6 percent, and one rate-setter said the bank could consider a hike in early 2018.

Markets currently fully price in a 25-point hike at the end of 2018.

Polish consumer prices ended more than two years of declines in November last year, and annual inflation hit 2.2 percent in February. But it then stabilised at 2 percent year-on-year in March and April before easing to 1.8 percent in August.

The central bank targets inflation at 2.5 percent and its last rate move was a half-percentage-point cut in March 2015.

Editing by Gareth Jones

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