Middle East tensions have driven up fuel prices, pushing Poland's inflation to its highest level since mid-2025, placing pressure on the central bank to tighten monetary policy.
Preliminary data showed that the September CPI rose 4% year-on-year, up from 3.4% in August, matching the median estimate in a Bloomberg economist survey.
As an energy importer, Poland has seen persistently rising inflation. This month, Iran-related tensions pushed crude oil prices up by approximately $12 per barrel.
At the same time, the government scrapped its costly fuel price cap; the government proposed a windfall tax on the energy sector to subsidize drivers, but the proposal was vetoed by the opposition-leaning president.
JB Drax Honore chief strategist Andrzej Pacheco said pump prices have not fallen back, and headline inflation has breached the central bank's tolerance range of 2.5% plus or minus 1 percentage point, meaning policymakers may soon tighten policy.
In a research note published before the data release, Pacheco wrote: "If fuel price caps are not restored or energy prices do not decline, headline and core inflation could continue to rise in the coming months and remain above the target range for several quarters."
Central bank Governor Adam Glapinski struck a notably dovish tone after this month's Monetary Policy Committee meeting. He predicted that borrowing costs will most likely remain unchanged at 3.75% this year, a level that may persist until the middle of next year.
However, the 10-member committee is divided: Ireneusz Dabrowski and Henryk Wnorowski lean toward waiting; Ludwik Kotecki said that if central bank forecasts show inflation staying above 4% for an extended period, the policy committee could begin discussing a rate hike as early as next month, with an increase possible in November.
ING Bank Slaski and Bank Pekao analysts revised their expectations on Tuesday, with both institutions now forecasting a central bank rate hike.
Markets are betting that the inflation data will drive policy tightening, and the Polish zloty appreciated 0.2% against the euro on Wednesday.
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