Poland's central bank focuses on fuel, food, wage risks to inflation for 2008

Poland's central bank highlighted risks of higher price pressure from jumps in food and fuel prices as well as expected rises in unit labour costs next year in its annual monetary policy guidelines published today.

The bank's policy council also reiterated its commitment to bringing Poland into the euro 'as soon as possible', a stronger line than that taken by the conservative government and bank governor Slawomir Skrzypek.

The guidelines emphasised that the bank would aim to keep inflation as close to the central 2.5 pct target as possible, and not just within the wider 1.5-3.5 pct range.

They also pointed to the labour market and public finances as the key to monetary policy over the last year, adding to the council's recent warnings over rises in long-term public spending commitments ahead of elections.

'It is expected that in 2008 we will see a further rise in unit labour costs, leading to a rise in inflation pressure,' the council said in the guidelines.

Source:By Patrick Grahamforbes.com