Miller's demand for further rate cuts points to worsening economic woes

Prime Minister Leszek Miller has accused the Monetary Policy Council (RPP) of acting irresponsibly by keeping interest rates high. "The preservation of such high interest rates ... in a situation of choked demand, decreasing rate of investment and slowing GDP growth is an irresponsible policy," Miller said in an interview on Polish Radio. Having reduced interest rates by 1.5 percentage points last month the RPP announced there would be no further cuts this year. Miller insisted yesterday that rates should come down by at least three points by the year's end. Krzysztof Rybinski, chief economist of Bank Zachodni WBK, commented that the Prime Minister's statement is evidence that the economic situation is deteriorating faster than the government has anticipated. He also pointed out that the RPP "is an independent institution and the Prime Minister is presenting it with an ultimatum. This will be unwelcome in the European Union, and it could cause a backlash on the financial markets." (Gazeta Wyborcza, p. 19) P.W.