This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart By way of reminder, inflation stood at 2.4 percent year on year in December, placing price growth close to the midpoint of the inflation target. Between May and December 2025, rates were cut by a total of 1.75 percentage points. The first pause came in January 2026.
The main rationale for keeping rates unchanged was the absence of new data on inflation dynamics compared with the RPP’s January meeting. It is only ahead of the March meeting that Statistics Poland (GUS) will publish its preliminary estimate of January inflation. The March inflation projection from the National Bank of Poland (NBP) will also be released then, outlining the expected effects of the rate cuts implemented so far. Those effects materialize with a lag and become fully visible only after four to six quarters.
At his press conference, NBP President Adam Glapiński also highlighted the solid data coming in from the economy over the past month. At the same time, he stopped short of judging whether the rather unexpected acceleration in wage growth in the enterprise sector in December was a one-off or not. Both factors – a strong cyclical backdrop and wage pressure – may have a pro-inflationary impact, and together they also underpinned the current pause.
International backdrop
The headline chart shows current policy rates across EU countries, as well as in the United Kingdom, the United States, and Japan. The highest rates are in Hungary and Romania (6.5 percent). Poland’s rate is now broadly in line with those in the United States, the United Kingdom, and Czechia (3.5–4 percent). The lowest rates are in the euro area, Sweden, and Denmark (1.6–2 percent), as well as in Japan.
Interactive chart Japan, however, is at a very different point in the cycle from the others. Elsewhere, central banks are either cutting rates or holding off on further moves (as in Poland or the United States). The European Central Bank took the same decision today. In Japan, by contrast, rates are being raised – or pauses in hikes are being implemented – which has recently fueled concerns over yields on Japanese government debt.
XYZ’s perspective
The most likely timing for a return to rate cuts appears to be the March meeting. By then, the RPP will have access to inflation data for the start of the year as well as figures on wage growth. These are all the more important because the turn of the year can produce surprises, with key factors including regulations affecting energy prices and the increase in the minimum wage. March will also see the publication of the NBP’s projection, which serves as a “roadmap” for the RPP.
In my view, there is a strong chance that the data will surprise on the downside. Wage pressure may turn out to be lower than expected, and inflation more subdued. That would point to a rate cut in March. Under such a scenario, policy rates could fall below 3.5 percent. In an alternative scenario, the improvement in economic conditions observed so far would translate more meaningfully into inflation and the labor market. That would prompt the RPP to ease monetary policy more cautiously. I am closer to the first scenario, but the existence of two plausible paths – and the uncertainty surrounding them – justifies yesterday’s decision to keep rates unchanged.
Key Takeaways
- Policy is on pause, not on hold. RPP has kept rates unchanged due to a lack of new inflation data, but March remains a live meeting. Fresh figures on inflation, wages, and the NBP’s updated projection will be decisive.
- Domestic data will outweigh global trends. While Poland’s policy rate now sits close to those in the US and the UK, the next move will hinge primarily on local inflation dynamics, wage pressure, and regulated prices — not on international rate cycles.
- Two paths remain open, with downside risks to inflation. Softer wage growth and lower-than-expected inflation could reopen the door to rate cuts as early as March, potentially pushing rates below 3.5 percent. A stronger pass-through from growth to prices would argue for a slower easing pace.