Piotr Bielski News
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Poland’s central bank cut its main interest rate by more than economists estimated to a record low as the worst economic slowdown in 12 years looms after consumer spending plunged amid Europe’s debt crisis.
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Polish retail sales increased faster than economists expected in March, fueling speculation the central bank will raise interest rates again to control inflation.
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Poland’s economy slowed more than economists forecast in the third quarter as export gains failed to offset weaker consumer spending, boosting expectations for an interest-rate cut next week.
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Polish inflation probably peaked in May and will slow in the coming months as the effects of three interest rate increases by the central bank curb price growth.
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The zloty gained to the strongest level in more than a week, erasing earlier losses, after U.S. payrolls topped analyst estimates, boosting investors’ appetite for riskier assets.
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Poland’s central bank, which raised borrowing costs two months ago, has room to deliver the biggest cut in its main interest rate since 2009 to fight an economic slump, central banker Andrzej Bratkowski said.
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Poland’s annual inflation rate rose in line with economists’ forecasts in October, prompting traders to cut their bets on an interest-rate increase this month.
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Polish industrial output accelerated for a second month in December as a recovery in Germany broadened and Polish wages rose, increasing the chances of higher borrowing costs in central Europe’s biggest economy.
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Polish inflation probably accelerated to the fastest since September 2008 last month as concern that price-growth is spreading beyond food and fuel prompts the central bank to raise interest rates.
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Poland’s inflation rate fell for a second month in January, reaching its lowest level since July 2011 as a stronger zloty cut the price of imported goods and reducing the probability of a central bank rate increase.
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