POLAND: Flash Data Implies Drop In Core Inflation, Boosts Chance Of Imminent Cut

Local sell-side analysts note that one of the reasons behind today's inflation undershoot was a likely dip in core inflation, which would be a welcome development from the NBP's perspective. They write that another set of benign data increases the chance of an interest-rate cut at the NBP's monetary policy meeting next week.

• ING note that lower energy price hikes and a dip in core inflation to +2.8% Y/Y from +3.0% allowed for a decline in headline inflation below the consensus forecast. This cements their call for a 25bp interest-rate cut next week. They note that both headline and core inflation will track below the NBP's projection in 4Q25.
• mBank write that the +2.4% Y/Y print imply (1) a 25bp rate cut in December, (2) a core inflation rate of around +2.6% Y/Y, (3) a decent chance of a dip in headline inflation below +2.0% Y/Y in 2026, and (4) plenty of room for further interest rate cuts.
• Pekao write that 'the MPC will lower interest rates in December' and follow up with two quick cuts at the beginning of 2026 after inflation fell below the target.
• PKO note that a drop in core inflation (likely to around 2.6-2.7% Y/Y from +3.0%) and a continuation of favourable trends in food prices underpinned a downside surprise in headline CPI, with the 'food and non-alcoholic beverages' category undershooting seasonal pattern. However, heat prices likely keep rising, as indicated by dynamics in the composite 'energy carriers' category. PKO think that inflation has now returned sustainably to the target, which will allow the MPC to continue its 'non-cycle' of rate cuts and the probability of a reduction in December has increased.