MNI NBP Preview - Oct 2025: Close Call
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Executive Summary:
- Consensus is split between a 25bp cut and a hold; our bias is marginally toward the former.
- CPI stayed below +3% Y/Y, wage growth cooled & electricity price uncertainty dissipated.
- However, expansionary fiscal policy remains a major source of concern.
The notorious opacity of the National Bank of Poland’s (NBP’s) reaction function underpins split market consensus, with the Monetary Policy Council (MPC) set to weigh another 25bp interest-rate cut against a hold. Relatively benign inflation, cooling wage growth, and reduced uncertainty around the outlook for electricity prices argue in favour of resuming monetary easing. However, a stand-pat decision would align with the MPC’s previous decision-making pattern, the timing of the next in-house macroeconomic forecast, and recent rhetoric emphasizing caution amid expansionary fiscal policy. While we see solid grounds for justifying a rate cut and place limited weight on calendar factors or cyclical considerations, an on-hold decision appears almost equally likely. Ultimately, the meeting’s outcome may hinge on the dynamics of the closed-door discussion.
