Recent concerns about the risk of deflation in Poland have prompted the National Bank to raise the possibility of a cut in interest rates later in the year. As it happens, most indicators of underlying price pressures suggest that the risk of a drop into outright deflation is low. But equally, they suggest that inflation will remain extremely subdued over the coming months. Accordingly, while it seems unlikely that the MPC will opt to cut interest rates this year, monetary policy will remain extremely supportive.
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