Monetary Policy Council raises interest rates by .25%

"This is a logical decision. Inflation will go up, so there is no sense in waiting to increase the rates in July, especially considering that changes made to the parameters of monetary policy will be visible within three quarters at the earliest," said Pekao analyst Marcin Bilbin. According to the members of the RPP there has been a decline in the growth of wages and the efficiency of work, thus it is possible that inflationary pressure will become more evident. Ryszard Petru, the chief analyst of Bank BPH and one of the few to predict the rate increase, believes that the RPP also took into account decreases in disability pension contributions, which will have a positive effect on internal demand. "I have not excluded the possibility of yet another rise in interest rates for July, but it is difficult to bet on. It will depend on current inflation and labor market data," said Petru. Currently the base interest rate stands at 4.25%, but analysts expect that it will increase to 5% by the end of the year. (Puls Biznesu, pp. 1, 9; Rzeczpospolita pp. A1,B1; Parkiet, p. 2,17) M.M.