RPP keeps rates on hold, but not for long warn analysts

"The decision suggests that it intends to apply 1-3 month breaks between further interest rate hikes. In the meantime, it will await macroeconomic data, which might influence inflationary forecasts," said Jacek Wiśniewski, economist with Raiffeisen Bank. The RPP pointed out at the latest data from the labor market indicated a continuation of the trend of high wage growth and a deterioration of relations between wage growth and efficiency. The latest inflationary forecast of the Council is that the CPI would range from 2.3-3.3% in Q4, 2.1-4.1% in 2008 and 2.1-4.5% in 2009. "I anticipate further increases in interest rates in August and October. Within one year rates will go up by 75 base points. The market is expecting a more restrictive monetary policy and expects at least four increases in interest rates," said Jacek Wiśniewski. (Parkiet, pp. 1, 12; Rzeczpospolita, p. B2; Puls Biznesu, pp. 1, 9) M.M.