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NBP: Governor Guides Towards Rate Cuts In 2026 At The Earliest

NBP

Governor Adam Glapinski suggests that it is now "obvious" that interest-rate cuts while inflation is on the rise are out of the question, guiding that they could happen in 2026 at the earliest, when inflation will be falling towards the target.

  • The official earlier said that headline inflation will reach around +5% Y/Y at the end of this year and may accelerate further in early 2025. He noted that the partial withdrawal of energy price caps from July 2024 and the assumed full withdrawal from January 2025 will boost prices in these months by 1.6% and 3.6% respectively.
  • The Governor said that the new projection shows that inflation should return to the +2.5% Y/Y +/- 1pp inflation target in 2026, but this forecast is based on the assumption that the NBP's interest rates would remain unchanged.
  • Governor Glapinski flags concern about robust wage growth, while also noting that the propensity of households to save will be an important mediating factor.

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