MNI NBP Preview - July 2025: Low Chance Of Cut

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Executive Summary:

• Consensus is leaning towards an on-hold decision as familiar uncertainties remain.
• Lower starting point and more benign outlook should result in dovish CPI forecast revision.
• Guidance from MPC members indicated caution and low probability of immediate cut.

The inflation path in 1H25 belied the scenario charted by National Bank of Poland (NBP) staffers in their March report, which should find its reflection in the updated forecast supporting this week’s rate decision. However, it seems that neither the relatively dovish realised inflation trajectory, nor the relatively benign medium-term inflation outlook will sway the Monetary Policy Council (MPC) to immediately resume cutting rates. Latest communications from panel members suggest that their bias is tilted towards inflationary risks and sources of uncertainty. Considering the perspective of the policymaker, we align with consensus in expecting the MPC to stay put this week, before restarting interest-rate cuts and potentially formally announcing an easing cycle in September.