The National Bank of Poland (NBP) left its benchmark interest rate unchanged at 3.75% on September 9, a widely expected decision as rising fuel prices weakened the case for resuming monetary easing.

Annual consumer price inflation accelerated to 3.4% in August from 3.0% in July, flash data from the statistics office GUS showed. Higher fuel prices drove the increase, while underlying inflation excluding food and energy probably also rose, the central bank said.

“The council’s future decisions will depend on incoming information concerning the outlook for inflation and economic activity in Poland,” the NBP said.

Global commodity prices and inflation, fiscal policy, domestic economic activity and wage growth remained risks to the inflation outlook, the central bank added.

The August reading brought inflation close to the upper limit of the NBP’s 2.5% target with a tolerance band of one percentage point either side.

Further increases in fuel prices could push inflation towards 4% in the coming months, Dutch banking group ING said.

The outlook has deteriorated since July, when NBP governor Adam Glapiński suggested he might propose a rate cut after the summer break. Renewed escalation in the Middle East has since lifted oil prices by around $20 a barrel towards $100, Polish lender PKO BP said.

“In these conditions, there is no scope for rapid interest rate cuts,” PKO BP economist Urszula Kryńska said in a September 9 note.

PKO BP nevertheless saw no need to raise rates, arguing that cautious consumers and slowing spending growth were limiting the spread of higher energy costs through the economy.

Inflation could return to target around mid-2027, allowing the council to resume gradual cuts, the bank said.

A longer pause is now the central forecast at rival Bank Pekao, which said on September 9 that rates would remain unchanged through the end of 2027. Stronger economic activity, rising inflation and higher interest rates abroad had prompted the revision.

Poland’s annual GDP growth accelerated to 3.9% in the second quarter from 3.5% in the first, with investment growth strengthening. Consumption growth and annual wage growth nevertheless slowed, while employment in the corporate sector continued to decline in July.

"The [September 10] press conference with the NBP Governor [Glapiński] is likely to strike a more hawkish tone than in July. Even so, we expect the overall message to remain more cautious than current market pricing, which implies more than 75bp of interest rate hikes," ING said.