Inflation data cool fears of interest rate hike

 "The debt market strengthened following the publication of the surprisingly positive data. Profitability of two-year T-bonds dropped by a few basis points," said Marcin Bilbin, an analyst with Pekao. The better than anticipated results on inflation were due to food and fuels prices falling in comparison with November and concerns of an imminent interest rate hike have been somewhat soothed. "Fears that rapid growth of consumption will contribute to growth of inflation have not been realized so far. The data give no ground to assume that even a GDP growth of close to 6% in Q4 2006 would translate into growing prices. This is good news for inflation," said Marcin Mróz from Fortis Bank. However, analysts are divided over whether inflation will start increasing within 2007. (Puls Biznesu, pp. 1, 9) M.M.