Is a worst-case scenario for borrowers inevitable? There is a voice from the MPC
MPC member Przemysław Litwiniuk does not rule out that interest rates will increase this year – for the first time in four years. This would be terrible news for borrowers.
A week ago, the Monetary Policy Council (MPC) – in line with experts’ expectations – decided to leave interest rates unchanged. The main reference rate is 3.75%.
After a series of interest rate cuts last year (the Monetary Policy Council cut six times), this year it happened only once, during the March meeting. According to the words of Council members, such a scenario is out of the question in the near future, which is bad news for borrowers (the reduction would be associated with a decline in mortgage or business loan installments). – I do not expect further interest rate cuts due to geopolitical uncertainty – said Przemysław Litwiniuk, MPC member, on the sidelines of the Impact’26 congress, quoted by Money.pl.
Interest rate increases this year?
What’s worse, Litwiniuk does not rule out that there will be interest rate increases this year. – In my opinion, a more likely scenario by the end of the year is a rate increase. If the price phenomena caused by the conflict in the Middle East lead to a de-anchoring or a threat of de-anchoring of inflation expectations and an increase in the risk of impact on prices and wages, the Council should be and is ready to increase interest rates – said the MPC member.
Litwiniuk, however, warned that this was not the right moment for such considerations. The July inflation projection will be crucial. – The July projection will be the first document that will open a period of reflection. July will show us something, but as I said, it will open a period of reflection, I do not expect a decision in July – said a member of the body.
A week ago, the president of the National Bank of Poland (NBP) and the chairman of the Monetary Policy Council, Adam Glapiński, also talked about the possibility of interest rate increases. – Do I anticipate there may be raises? They can be. Each member of the council allows for the possibility that if inflation continues to rise, there will of course be interest rate increases. A raise, raises, it’s hard to say – said the head of the central bank.
Let us recall that the last time the Monetary Policy Council increased interest rates was in September 2022, i.e. almost four years ago.
