The MPC did not say the last word? Possible further cutting of the feet

A member of the Monetary Policy Council, Cezary Kochalski, announced in an interview with ISBnews that in his opinion there is still a space for further cuts of interest rates in 2025. In his opinion, a reduction in the order of 25-50 base points is possible, but they should not be treated as the beginning of a wider cycle of loosening of monetary policy, but as adaptation.

Reduction of percentage rates

The July meeting of the MPC ended with a decision to reduce interest rates by 0.25 percentage points, which was contrary to the expectations of the market, which assumed no change. As for the September decision, Kochalski points out that there is no decision yet, and a possible lack of cutting in September may increase the chances of traffic in October. He said that he would not be resistant before adjusting the level of foot levels by 50 base points in October, especially if additional information about the draft budget for 2026 appears and about the dynamics of remuneration.

At the same time, Kochalski reminded that the November inflation projection of the MPC can provide new data on further activities in 2026. He also mentioned the need to take into account the ETS-2 system, which will expand CO₂ emissions to transport and construction, which can affect energy prices.

Inflation will fall

According to the data of the Central Statistical Office, inflation in June 2025 amounted to 4.1 percent. year on year, and in relation to May the increase in prices of consumer goods and services amounted to 0.1 percent. Meanwhile, the July projection of the National Bank of Poland provides for a more favorable inflation than in March. According to its central scenario, the average annual inflation in 2025 will amount to 3.9 percent, and in 2027 it will fall to 2.4 percent.

Kochalski estimates that in July, CPI inflation may be even in the range of 2.5-3 percent. It draws attention to the importance of factors such as wage dynamics and fiscal policy, which can still affect the further development of the inflationary situation. In his opinion, data for the holiday months may be extremely beneficial from the point of view of fighting inflation.