This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart The decision came as little surprise, particularly in light of the recent inflation reading for May, which at 3.1% was significantly lower than market expectations. It also followed a slowdown in wage growth in the enterprise sector, which eased to 5.4% in April.
More rate hikes than cuts in May
How have other central banks behaved over the same period? Data from the Bank for International Settlements, presented in the chart above, show clearly that a shift in the monetary-policy regime has taken place.
In the second half of 2025, interest-rate cuts dominated, significantly outnumbering rate increases. In many months, hikes were marginal or absent altogether. The trend peaked toward the end of 2025, when the number of rate cuts reached very high levels – between 10 and 14 cases per month – suggesting a broad and largely synchronized easing cycle as central banks responded to slowing inflation.
Three months have now passed since the US strike on Iran. In March, central banks easing monetary policy (four) still outnumbered those tightening it (two), the same ratio as in February. By April, the balance had evened out, with two central banks raising rates and two lowering them.
May marked the first period since the 2022–23 tightening cycle in which monetary policy was more often tightened (five cases) than eased (two cases). The countries in the former group were Australia, Iceland, Indonesia, Norway and South Africa. Meanwhile, rate cuts were implemented by Brazil and Russia.
In Brazil, the rate-hiking cycle ended only in mid-2025 – at a time when the European Central Bank had already reduced its key interest rate to its current level of 2%.
Rate hike in the euro area in June?
The National Bank of Poland (RPP) belongs to the largest group of central banks - those that kept interest rates unchanged in May. The same was true for the world’s major monetary authorities, responsible for policy in the United States, China, and the euro area. Interest rates have remained steady in these regions since December 2025 (the United States) and since mid-2025 (the euro area and China).
This could change as soon as next week, when the Governing Council of the European Central Bank meets. Markets expect a decision to raise interest rates. Yesterday’s inflation reading did little to ease that expectation. In the euro area, inflation rose from 3.0% to 3.2%.
In Central and Eastern European countries (with the exception of Latvia), inflation is already at least around 4%. In Bulgaria, Greece, and Lithuania, it has reached 5–6%.
If analysts’ expectations are confirmed, this would mark the first interest-rate hike in the euro area since September 2023.
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