According to analysts at TD Securities, there is little doubt that the NBP will keep its policy rate at 1.5% today.
Key Quotes
“On the face of it NBP policy took a slightly hawkish shift at the November meeting with 2019 inflation forecasts raised by about 0.5ppt to a range of 2.6-3.9% due to expected rises in household electricity prices resulting from reforms in the domestic energy market. Indeed a vote was taken, but not passed, to hike by 25bps. However 2020 forecasts were hardly changed at 1.9-3.9%, with second-round effects of the energy hikes being seen as limited.”
“Furthermore, preliminary November CPI inflation surprised to the downside coming in at 1.2% Y/Y. The recent fall in oil prices should ensure that headline inflation converges even closer to core, which was running at 0.9% Y/Y in October.”
“The manufacturing PMI index fell to 49.5 in November from a prior 50.4, which confirms the MPC’s view that the economy is gradually slowing. So, notwithstanding the odd hawk or two, the MPC’s view will remain that rates can stay on hold until well into next year.”
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