UPDATE 1-Retail sales point to deepening Polish slowdown
* Polish retail sales, jobless data for June disappoint
* Readings weak despite EURO 2012 championship
* Data point to deepening slowdown, faster rate cuts
WARSAW, July 26 (Reuters) - Poland's retail sales and unemployment data proved weaker than expected in June, pointing to a further deterioration of economic fundamentals and reinforcing market expectations that the central bank could soon consider cutting interest rates.
Retail sales rose 6.4 percent year-on-year last month, below the 8.95 percent forecast that was largely underpinned by hopes that Poland's co-hosting of the Euro soccer cup in June would boost consumption.
Analysts also expected that a strong seasonal rise in job creation, as often reported in the summer months, would also leave less Poles out of work.
"The unemployment data could point to a more serious slowdown of the economy," said Wojciech Matysiak, economist at Bank Pekao.
The largest central European economy expanded by an impressive 4.3 percent in 2011, one of the fastest rates in the European Union, showing strong resilience to the ongoing financial turmoil in the euro zone, Poland's key trading partner.
But after four years of a shaky global economy, Poland may now be slowly but surely losing steam, with its growth rate expected at 2.5-3.0 percent this year and much uncertainty as to the outlook for 2013 and beyond.
The zloty weakened 0.1 percent against the euro immediately after the date release, with bonds also reflecting a gloomier economic outlook. The two-year bond yields fell 2-3 basis points.
"We thought that the Euro 2012 championship would have a clearly positive impact on (retail) sales, but this factor had only a moderate influence," said Mateusz Sutowicz, analyst at Bank Millennium.
"It is clear that the situation on the labour market is limiting consumption. The data fits into a scenario of a gradual slowdown, which supports the arguments of the dovish wing of the Monetary Policy Council."
Two members of the 10-strong MPC have recently called for interest rate cuts as soon as at the Council's next rate meeting in September and said that the 25 basis points rate hike in May was a mistake.
Poland's central bank raised borrowing costs in May because it believed back then that the risks from tolerating persistently high inflation were greater than from the looming slowdown.
Inflation has held above the bank's 2.5 percent target for most of the last five years and accelerated to an annual 4.3 percent in June.
In the latest Reuters survey, most analysts said they expected the central bank to keep rates steady at 4.75 percent this year and cut them in the first quarter of 2013.
Forward rate agreements are pricing in the first 25 basis point cut in the next three months.
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