Rise in the cost of food reduces the chances of an interest rate cut next week

A rise in food prices in the first two weeks of May has reduced the chances of an interest rate cut being announced next week. Food and non-alcoholic beverage prices rose by 1% in the first half of this month compared to the second half of April, and by 1.4% from a month before. According to the Central Statistical Office (GUS), the main reason for the rise was the seasonal increases in fruit and vegetable prices. Following the release of the GUS data, the Finance Ministry said that it now expects inflation to rise to 6.8 percent year-on-year in May, from April' s 6.6 percent. Janusz Krzyzewski, a member of the rate-setting Monetary Policy Council (RPP), told the PAP news agency, "Such a large food price increase in May will make it difficult for the Council to make a quick rate reduction decision." (Rzeczpospolita, p. B2; Reuters) A.D.