Poland: NBP maintains its hawkish credentials
Today the Polish central bank (NBP) in line with the consensus expectation decided to hike its key policy rate by a further 25bp to 5.75%, but contrary to our expectation of unchanged rates. This is the third consecutive hike in as many months, and further demonstrates that the NBP remains committed to fighting inflation. The hike undoubtedly has to be seen in light of the fact that inflation remains above the NBP’s inflation target of 2½% +/- 1%-point, and we believe is likely to remain
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Czech Republic: Strong CZK keeps CNB on hold
As expected the Czech central bank (CNB) today decided to keep its key policy rate unchanged at 3.75% despite the significant rise in inflation in recent months. There is no doubt that the continued strengthening of the Czech koruna frustrates the majority of the CNB board members, which is most likely the main reason why the CNB today decided to keep interest rates on hold despite the fact that inflation now running at 7.5% y/y (February) is well above the CNBÂ’s inflation target of 3%
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Romania: NBR delivers another hike
This morning the Romanian central bank (NBR) delivered another rate hike as it lifted its key policy rate by 50bp to 9.50%, thereby showing its willingness to tame inflation. The hike was in line with expectations. In the statement that followed the rate decision NBR reiterated that inflation risks and the general sentiment require a tighter monetary policy, thereby indicating that further hikes are on the cards. At 9.50%, the key policy rate in Romania can hardly be said to be very high
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GBP: Updated BoE call and MPC Minutes
The minutes from MPC's January meeting were released today. We, and the markets, were surprised by the hawkish tone to the minutes. As a reflection of the more hawkish outlook for UK monetary policy, only one MPC member (Blanchflower) voted for a reduction of the policy rate at the January 10 MPC meeting. This is a surprising; we had expected a more balanced voting result. The background to this surprise is that the MPC is more worried about inflation than the markets. It sees substantial
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