(Combines takes, adds analyst quote, background)
WARSAW, Nov 26 (Reuters) - Polish retail sales grew more slowly than expected in October, up 7.9 percent year-on-year compared with 11.6 percent in September, and analysts said Wednesday's data widened the scope for rate cuts.
Most analysts expect the central bank to keep its benchmark interest rate on hold at 6.0 percent at its monthly meeting on Wednesday due to continued inflation worries, but the market is pricing in a surprise cut.
Analysts in a Reuters poll had forecast October retail sales growth at 9.1 percent.
"The data were worse than expected and show retail sales are slowing. But consumption is a wider aggregate and it should stabilise economic growth next year, especially since we are going to have tax cuts," said Grzegorz Maliszewski, chief economist at Bank Millennium.
"The figure does not really change our perception because we have already had a series of data showing that the economy is slowing. For the doves (on the Monetary Policy Council) it supports their rhetoric for an easing in monetary policy."
The statistics office also said retail sales were up 3.8 percent in month-on-month terms, and released other data showing Poland's unemployment rate fell unexpectedly to 8.8 percent in October. Analysts in a Reuters poll had forecast October unemployment to stay at September's 8.9 percent level.
According to the Labour Force Survey (BAEL) also published by the statistics office on Wednesday, Polish unemployment fell to 6.6 percent in the third quarter of 2008 from 7.1 percent in the second.
The central bank and analysts watch the data closely for clues on inflationary pressures from wages.
Polish investments rose 7.9 percent year-on-year in the January-September period, the statistics office said, sharply down from 30.9 percent in the same period of 2007.
Poland's economic growth is seen slowing to about 5.2 percent this year and 3.5 percent in 2009 from 6.7 percent in 2007. (Reporting by Dagmara Leszkowicz, writing by Gareth Jones; Editing by Ruth Pitchford)