Interest rates rise when you don't expect what these results will bring
The expected interest rate hike today may be slightly higher than the market expected 0.5 percentage points, believes Ludwik Kotecki, Senate candidate for a member of the Monetary Policy Council (MPC). "The hike - yes, and how much - in my opinion, in a situation where the president talks about 7-8% annual average inflation, it prepares us for perhaps even a higher decision than 0.5 percentage points. Therefore, no I would be surprised if these rates rose a little more today, "Kotecki said during a meeting of the Senate Committee on Budget and Public Finance.
He recalled that at the end of December, the president of the National Bank of Poland (NBP), Adam Glapiński, informed that the preliminary forecasts of the National Bank of Poland showed that the average annual inflation would amount to 7.6% in 2022. "Just before the end of the year, the NBP governor announced that his inflation forecast for 2022 was much higher than he had previously communicated, which would suggest that it is indeed a preparation for today's MPC meeting, in the sense that today's decisions on interest rate hikes - because I would be very surprised if they were not there - they should be consistent with this raised inflation forecast, which is estimated at 7.6% annually by the NBP itself "- said Kotecki. The candidacy of Ludwik Kotecki - and Przemysław Litwiniuk - for MPC members is to be considered by the Senate during the meeting starting January 11, 2022.
The MPC, whose meeting is taking place today, raised interest rates for the first time in October, including the reference rate to 0.5% from 0.1%. In November, it raised the reference rate to 1.25%, and in December - to 1.75%. Kotecki: The return of inflation to the target area is very difficult and will not come soon In the current conditions, bringing inflation down to the level close to the inflation target will be very difficult and will not happen very soon, believes Ludwik Kotecki, Senate candidate for a member of the Monetary Policy Council (MPC). "The Polish Order is an additional factor which, in my opinion, will be pro-inflationary in the economy by increasing the costs of entrepreneurs.
Taxes and contributions have increased for entrepreneurs and they will translate into higher prices. It seems that in such conditions it will bring inflation down to the level of reaching the inflation target will be very difficult and will not happen very soon, "Kotecki said during the meeting of the Senate Committee on Budget and Public Finance.
The central bank's inflation target is 2.5% +/- 1 percentage point. Consumer inflation (CPI) amounted to 7.8% y / y in November 2021. According to economists, in December this year. it may exceed 8% y / y. Preliminary data (flash estimate) on December inflation will be released by the Central Statistical Office on Friday, January 7. The candidacy of Ludwik Kotecki - and Przemysław Litwiniuk - and members of the MPC are to be considered by the Senate during the meeting starting on January 11, 2022.