Goldman Sachs:

• GS say today’s print implies a considerable rebound in food price inflation. Core inflation continued to ease substantially, from +4.7% y/y to +4.1% y/y, according to their estimates.
• Goldman Sachs expect today's inflation print to mark the beginning of a temporary rebound in inflation as diminishing base effects and the partial expiry of household energy inflation shields will sustain the rebound somewhat through the rest of the year. Nevertheless, they expect that underlying inflation will continue to weaken, and continue to see a weaker-than-expected inflation outlook to lead the NBP to cut rates later this year.

JP Morgan:

• JPM say the impact of food VAT reinstatement was smaller than anticipated. Food prices were the key mover in April, with a tax-driven 2.1% m/m increase. Although a sizeable move, this is below JPM’s 3.1% m/m assumption, and suggests retailers absorbed even a larger part of the 5%-pt VAT increase than what they expected, corroborating the anecdotes about “discount wars” between big Polish food retailers.

ING:

• ING estimate that core inflation excluding food and energy prices slipped to around 4.0% y/y. They say the main part of core price disinflation is now behind us, and core inflation will remain close to 4% in the coming months. This means that the threat of elevated consumer inflation is not over, and the NBP will most likely stick to its hawkish rhetoric as a result.
• However, ING note there is a high degree of uncertainty surrounding the forecasts for the inflation path through 2H. The government has announced a partial freeze on electricity prices for households, but it is still unclear as to which level the distribution charges will be and whether action will be taken to limit potential gas price increases. In addition, we are likely to see changes to energy tariffs over the course of this year.