The surge in Polish inflation to a fresh two-decade high in August has shown no sign of prompting a more hawkish shift at the central bank. But with inflation likely to remain stuck above target for some time, monetary conditions will need to be tightened aggressively over the coming years. Meanwhile, there are some encouraging signs out of Israel that new virus cases and hospitalisations are starting to level off as the third booster dose has proven highly effective in early studies. We think tighter restrictions may be avoided and that the economy will continue to grow at a solid pace in Q3 and Q4.
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