Poland’s manufacturing shrank the most in 45 months in April, a sign that the European Union’s largest eastern economy continued to slow and may need more interest- rate cuts, according to HSBC Holdings Plc.
The yield on Poland’s 10-year bonds fell to a record low, making April the best month for the notes since November 2008, after policy maker Jerzy Hausner said the central bank will consider cutting rates further.
Poland’s central bank will probably cut rates for a third month in January as a “deep” economic slowdown threatens to push the inflation rate below the bank’s tolerance limit, policy maker Jerzy Hausner said.
Polish borrowing costs may rise if the inflation rate takes longer to return to the central bank’s target than policy makers expected, said Jerzy Hausner, a member of the rate-setting Monetary Policy Council.
Poland’s economy is set to show the weakest pace of expansion in three years, prompting investors to bet the central bank will keep cutting interest rates and prolong the biggest bond rally in a decade.