More interest rate cuts? Yes, but only minor ones and after a break.

The November inflation and GDP projection provides grounds for further interest rate cuts, but on a small scale and probably after a break, possibly longer, economists say.

RAFAŁ BENECKI, ADAM ANTONIAK (ING)

"The communication so far has declared that the Council is implementing "adjustments" in monetary policy, but the latest series of cuts has formed a rather concentrated cycle of cuts in the cost of money. The Council's decisions were mainly driven by the decline in current inflation and the improvement in its future prospects.

Risks to energy prices in the fourth quarter of 2025, which the central bank saw but not the market, have not materialized. The Monetary Policy Council (MPC) likely also realizes that the beginning of 2026 will not bring a significant increase in energy prices, as the updated tariffs of the Energy Regulatory Office (URE) will likely be lower than those currently in force. Risks related to the entry into force of the ETS2 system are also being postponed. Hence the statement about improving inflation prospects "in the coming quarters" in the post-meeting press release.

Taking into account the significant scale of the reduction in the cost of money this year (150 basis points), the fact that the Council rarely decides to change monetary policy parameters in December, and the lack of a clear picture of the inflation situation at the beginning of the year, we may now be dealing with a break in interest rate cuts for several months.

January inflation data, published in February, will be reduced and will be revised after the CPI basket update in March, along with the publication of February data. In this context, we expect the next rate cut may not occur until March. We expect inflation to remain close to the NBP target, which still leaves room for interest rate adjustments. We see the target level of the reference rate still in the range of 3.5-4%, but it will likely be achieved in the middle of next year, not 2027 as previously assumed.

MILLENNIUM BANK

"However, in our opinion, the macroeconomic projection results published by the Monetary Policy Council suggest that the Monetary Policy Council may refrain from further interest rate cuts. The upward revision of inflation forecasts for 2027 and the expected acceleration in growth, amidst a loose fiscal policy, should encourage caution in administering further monetary easing. This is especially true given that interest rates have fallen by 150 basis points this year.

Based on this, we believe that interest rates may remain unchanged in the coming months. This is especially true given that the Council may wish to await clarification on inflation risks related to the development of administered prices at the beginning of the year, the impact of the minimum wage on wage growth in the economy, and the impact of changes in the inflation basket on the inflation path. However, President Glapiński's press conference tomorrow and the details of the macroeconomic projection, which will be published in the coming days, will be crucial in verifying this thesis.

The path of core inflation and wages will be particularly important in this context. However, we maintain our expectations for the target rate next year at 3.50%. However, the path to this level remains subject to heightened uncertainty.

MONIKA KURTEK, POST BANK

"The Monetary Policy Council (MPC) did not surprise financial markets today and lowered interest rates by 25 basis points for the fourth time in a row and the fifth time this year. The scale of the cuts now amounts to 150 basis points. The main reason for this decision was, as indicated in the press release following the Council meeting, the preliminary October inflation reading of 2.8% year-on-year, which was lower than forecasts (both by the market and the MPC itself). Furthermore, the Council reviewed the latest CPI and GDP projections prepared by the National Bank of Poland (NBP), which, as expected, significantly revised down the inflation path for this year, which probably further strengthened the Council's belief that there is still room for cuts, and that they are here and now.

After today's decision, we should expect a pause in monetary policy easing, but this is likely not the end. Looking at the latest NBP CPI forecasts for 2026, we see that they are higher than average market forecasts, so at the beginning of next year, the room for rate cuts may increase again. In my opinion, the Council may be inclined to cut rates again in March 2026. At the end of next year, the reference rate could be 3.50%, compared to 4.25% at the end of this year.

PEKAO ANALYSIS

"And what about the new NBP inflation projection? A lot of good, albeit expected, news. In 2026, inflation will be around 3%, and in 2027 it will remain within the target. In addition, there is a strong upward revision of GDP growth for 2026. This is still a solid basis for further rate cuts (in our opinion, -75 basis points in the first half of 2026)."

JAKUB BOROWSKI, CREDIT AGRICOLE

In our opinion, similarly to October this year, the tone of the statement following the November Council meeting is not clear, and the Monetary Policy Council's stance in monetary policy remains unclear.

The statement released after the Monetary Policy Council meeting indicates that the main arguments that prompted the Council to ease monetary policy were the lower-than-expected preliminary inflation estimate in October (...), as well as the results of the National Bank of Poland's November projection, which indicated limited inflationary pressure in 2026-2027. In our opinion, the scope for interest rate cuts in the coming quarters remains limited, as indicated by the November projection's expected stabilization of inflation in 2026-2027 at a level close to the Monetary Policy Council's target.

We therefore maintain our scenario, according to which the target level of the NBP reference rate, consistent with macroeconomic equilibrium, is 4.00%. Consequently, we expect the next and final 25 basis point interest rate cut in the cycle in the first quarter of 2026. This scenario is supported by our short-term inflation forecast, according to which price dynamics, boosted by low base effects on food and fuel prices, will increase to 3.5% year-on-year in the fourth quarter of 2026."

In the opinion of the Monetary Policy Council, taking into account the decline in inflation and the improvement in its outlook in the coming quarters, another adjustment of the NBP interest rates became justified in November.

At its meeting on 4-5 November 2025, the Monetary Policy Council reduced all NBP interest rates by 25 basis points, including the reference rate to 4.25%. The decision was in line with market expectations.

This was the fourth cut in a row and the fifth in all of 2025. The Monetary Policy Council (MPC) previously cut rates in 2025 by 25 basis points in October, 25 basis points in September, 25 basis points in July, and 50 basis points in May. In total, the MPC has already reduced the cost of money by 150 basis points in 2025.

On Thursday, November 6, at 3:00 p.m., a press conference will be held with the President of the National Bank of Poland, Adam Glapiński. (PAP Biznes)

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