Polish CPI expanded 1.8% y/y in October, 0.1pp above the flash estimate late last month but 0.1pp below the annual growth rate recorded the previous month, the statistical office GUS reported on November 14.

Inflation remains subdued with Poland’s Monetary Policy Council (MPC) unlikely to consider any policy change in the immediate future, even though some slightly hawkish undertones were present at the council’s last meeting.

The combination of fast economic growth with only moderate inflation – which so far has been largely unaffected by fast-rising wages – is perfect for Poland, maintains the MPC, which has now sat tight on the record-low interest rate of 1.5% for over three years.

That is expected to be the pattern until the end of 2019 at least unless new factors come into play, the governor of the central bank NBP and the council’s head Adam Glapinski said earlier this month.

Those new factors could be the drying up of influx of Ukrainian labourers if Germany, which is opening its labour market to non-EU workers, proves more attractive. Another is the yet unknown impact of rising prices of energy next year.

The annual CPI growth in the tenth month was driven by rising prices of food and non-alcoholic drinks, which increased 1.8% y/y. A growth of 2% y/y in housing costs was the other key driver of headline inflation.

Most other segments also recorded price growth in October, with prices in the transport segment – which is the third most weighted – advancing 7.5% y/y.

Similarly to August, three segments recorded annual price falls: textiles and shoes, communications and the lump sector of “other goods and services.”

In monthly terms, CPI grew 0.4% in October, following a m/m expansion of 0.2% in September.

Inflation is currently expected to remain subdued in November and December and rebound in early 2019, analysts predict.