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UPDATE 1-Polish corporate wages up 9.8 pct y/y in Oct-stats

Published 11/18/2008, 08:54 AM
Updated 11/18/2008, 09:33 AM

(Adds c.banker, market reaction, detail)

WARSAW, Nov 18 (Reuters) - Polish corporate sector wages grew 9.8 percent year-on-year in October to 3,242 zlotys ($1,075) per month, above expectations, the statistics office said on Tuesday, reducing prospects of a November rate cut.

Analysts in a Reuters poll had expected corporate wages to have grown 9.6 percent in year-on-year terms last month, down from 10.9 percent reported for September.

In month-on-month terms, wages rose 2.2 percent.

The data also showed corporate employment rose 3.6 percent year-on-year in October.

"The data is more or less in line with expectations, confirming the situation on the labour market remains good. This is a delayed effect of a good economic situation in previous quarters," said Piotr Bujak, economist at Bank Zachodni WBK.

Immediately after the data, which did not impact the zloty or bonds, a member of the central bank's Monetary Policy Council said he saw no room for interest rates cuts.

"There is no room for rate cuts for now," Dariusz Filar, a hawk on the 10-strong panel, told TVN CNBC.

Most analysts expect the MPC to start cutting rates in the first three months of the year as the global slowdown will sooner or later hurt the Polish economy. Some are even starting to bet on November as the timing of the first rate cut in several years, particularly after a series of dovish policymakers' comments that a cut should come soon.

There are four doves on the MPC, four hawks and two key swing-voters. In case of a 5-5 split, a cut would pass because the central bank governor's vote is decisive.

Slawomir Skrzypek, the bank's head, is widely seen as a dove.

Poland is one of the few countries which so far has been able to weather the financial crisis relatively well and where the central bank has seen no need to cut rates quickly to help the economy.

Hungary's gross wage growth surprisingly accelerated in September, data showed on Tuesday, even though its economy is mired in crisis.

In the neighbouring Czech Republic, the central bank is in an easing cycle to help boost the economy. (Reporting by Adrian Krajewski, writing by Karolina Slowikowska; Editing by Ron Askew)

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