Just as in May the IO results were accompanied by slightly softer than expected producer inflation report. The PPI grew by 2.8% y/y, far above the 2.4% y/y market consensus.
We believe it’s still a long way before producer price inflation starts filtering through into consumer prices this time. The increase was driven not only by higher commodity prices but also a notable 0.9% m/m increase in manufacturing –which we believe was largely due to the weaker zloty.