Wednesday, 28 October 2026
Poland’s Monetary Policy Council is widely expected to maintain interest rates at its meeting on 3–4 November 2026, as policymakers assess persistent inflation and uncertainty surrounding energy prices. The National Bank of Poland’s reference rate currently stands at 3.75%, and an unchanged decision remains the central expectation. According to Żaneta Chryczyk, a mortgage specialist at Lendi, the economic outlook provides limited justification for an immediate reduction, although a rate increase is not currently considered the most likely outcome.
Inflation remains above the central bank’s target, complicating the outlook for borrowing costs. Consumer prices increased by 4.1% year on year in September, according to Statistics Poland, exceeding the upper boundary of the National Bank of Poland’s target range. The central bank aims to maintain inflation at 2.5%, allowing for fluctuations of one percentage point in either direction. However, a temporary increase beyond this range does not automatically require higher interest rates, particularly if policymakers expect price pressures to moderate over subsequent months.
Energy prices represent one of the principal uncertainties facing the Polish economy. Elevated oil prices have increased transport and operating costs for businesses, creating the possibility of further price increases across goods and services. The extent to which these costs influence inflation will depend on whether companies pass them on to customers and whether higher living expenses contribute to stronger wage demands. For the Monetary Policy Council, the main consideration is whether these developments create lasting inflationary pressure rather than a temporary increase in particular prices.
Government measures to limit fuel costs may help contain inflation towards the end of the year. Poland’s CPN programme, introduced in October and scheduled to remain in place until 31 December 2026, includes reduced fuel taxation and restrictions on retail prices. Although these measures can reduce the immediate impact of international oil prices on consumers, they do not eliminate the underlying cost pressures. Their scheduled expiry could affect fuel prices in early 2027, but an increase is not inevitable. The outcome will depend on international oil markets, exchange rates and whether the government decides to extend or replace the existing arrangements.
Public finances add another consideration to the central bank’s assessment. Poland’s projected general government deficit for 2027 is estimated at 7.1% of GDP, raising questions about the extent to which public expenditure could sustain domestic demand. Strong consumer and investment spending may make it more difficult for inflation to return to target if businesses continue passing higher costs on to customers. However, the relationship between fiscal policy and inflation also depends on the composition of government spending, economic capacity and developments in private-sector demand.
International monetary conditions may also influence Poland’s interest rate outlook. The September increases in borrowing costs by the US Federal Reserve and the European Central Bank have altered the financial environment in which the National Bank of Poland operates. Although domestic inflation and economic conditions remain the principal considerations for Polish policymakers, differences between international interest rates can affect capital flows and exchange rates. A weaker złoty could increase the local cost of imported energy and other goods, although currency movements depend on several economic and financial factors.
For Poland’s residential property market, the immediate consequence is continued uncertainty over mortgage financing costs. An unchanged reference rate would provide some stability, but it would not guarantee that every borrower experiences the same repayment conditions. Households with variable-rate mortgages may see their instalments change when the relevant lending benchmark is updated, while borrowers with fixed-rate agreements generally retain their existing interest rate until the agreed period expires. Individual repayment amounts also depend on loan margins, outstanding balances and contractual terms.
The outlook is particularly important for households considering purchasing residential property. Expectations of further interest rate reductions can influence decisions about when to apply for a mortgage and how much debt to assume. If borrowing costs remain at current levels for longer than anticipated, some prospective buyers may need to adjust their budgets or postpone purchases. Nevertheless, mortgage demand will also depend on household incomes, employment conditions, housing prices and banks’ lending requirements.
Residential developers and property investors face similar considerations when assessing new projects. Interest rates influence the cost of development loans, refinancing arrangements and the availability of capital for construction. A prolonged period without further monetary easing could limit improvements in financing conditions, although the effect will vary according to individual companies’ debt structures and funding arrangements. Developers with substantial borrowing requirements may be more exposed to changes in financing costs than businesses relying primarily on existing capital or presales.
The National Bank of Poland’s updated economic projections will be an important element of the November meeting, particularly in assessing whether inflation is likely to remain elevated during 2027. Lendi’s analysis suggests that policymakers have sufficient reasons to maintain the current rate while waiting for clearer evidence about the direction of prices and economic activity. For Poland’s housing market, the most likely near-term outcome is therefore a continuation of existing monetary conditions rather than an immediate increase or reduction in interest rates.
