The central bank’s Monetary Policy Council (RPP) has kept its main interest rate at 5.75% for nine consecutive months even though the Consumer Price Index (CPI) has been below 3% since February this year.

But NBP’s governor Adam Glapiński said at a press conference on Thursday, one day after the RPP made its latest no-move decision, that there are no prospects for quick rate cuts amid the government's plans to remove caps on energy prices, which may spur inflation again.

“You can forget about cutting interest rates when inflation is rising, and significantly, from 2.5% to 5%,” Glapiński said as he assessed the effects of the removed energy price caps. “Such a possibility may appear in 2026 at the earliest, when inflation starts to fall.”

The limits on energy prices have been partly lifted from July, a move which will be followed by further reductions of price limitations from January 2025.

“We assume that the CPI will rise by 1.6 percentage points in July 2024, and then by another 1.3 percentage age points in January 2025,” Glapiński said.

He warned that there was a risk of inflation spiking to 5% at the end of this year.

“According to the current NBP forecasts, inflation may get close to as much as 5%, and grow a bit more at the beginning of next year,” he said.

He predicted inflation would start declining after the government’s price liberalization plans had been implemented.

“In the first quarter [of 2025] we can expect one more inflationary push related to the increase of energy [prices] and the growth of prices should start to gradually ease from the first quarter of 2025,“ he said.

“In 2026 we should be in the inflation target again, provided that we keep the current rates,” he added.

The NBP’s inflation target range is 2.5% +/- 1pp.