Poland seen raising rates toward year-end, no guidance change seen in March: Reuters poll

WARSAW (Reuters) - Poland's central bank is likely to start raising interest rates in the last quarter of 2014, a Reuters poll showed on Thursday, reflecting a strengthening recovery in central and eastern Europe's largest economy.

Most analysts polled said they did not expect the central bank to further extend its guidance for rates to stay at the record low they reached last July.

At its March meeting, the bank will release new economic growth and inflation forecasts that could support expectations of rate rises towards the end of this year.

The median forecast of 19 analysts polled on February 25-26 showed the key rate at its all-time low of 2.50 percent until a 25-basis-point increase in the last three months of 2014, unchanged from last month.

The poll also showed the bank was likely to raise rates further to 3.50 percent by end-September 2015.

All analysts polled expected rates to remain flat at the meeting ending next Wednesday, in line with the bank's guidance. The bank reiterated in February it would stick to its pledge to hold rates steady until at least June this year.

Twelve analysts of 18 who submitted answers said they did not expect the bank to extend its guidance in March.

"It is clear that opinions within the Council have already started to differ. Thus, it is unlikely that the Council would agree on a future rate path," said Grzegorz Ogonek, economist at ING Bank Slaski.

In February, rate-setter Andrzej Rzonca told Reuters there was no reason to extend the guidance beyond June. Earlier, policymaker Elzbieta Chojna-Duch warned against raising rates too quickly.

"More flexibility in the form of not extending the forward guidance will not hurt the recovery," ING's Ogonek added.

Inflation in Poland stands at an annual 0.7 percent, deep below the 2.5 percent bank's target, but it is expected to accelerate in the second half of the year.

Poland's expected rate path contrasts with most of Europe. The European Central Bank cut rates in November last year and some analysts say it could cut more.

Czech rates are near zero, and its central bank is intervening in currency markets to ward off deflation.

Hungary's central bank has been cutting its main rate month-by-month since late 2012, most recently to a record low of 2.7 percent in February.

(Reporting by Marcin Goettig; Editing by Ruth Pitchford)

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