RPP expected to leave interest rates unchanged at this week's meeting

The central bank's Monetary Policy Council (RPP) is expected to leave interest rates unchanged at its meeting this week. According to analysts polled by Reuters, the RPP will act with caution, in view of the likely impact of government plans to expand the budget deficit. Despite agreeing that the slowing economy needs lower borrowing costs, the majority of the analysts say they think the RPP will wait until July to cut rates. Mioslaw Gronicki, economist at BIG Bank Gdanski, who expects a reduction of 200 basic points in July, says, "The economic figures suggest there should be a rate cut, but with the budget revision hanging over their heads, they are more likely to move next month." Supporting his view is Andrew Kenningham, economist at Merrill Lynch in London, who says, "I would put my money on July, but the RPP is unpredictable." (Reuters)