The National Bank of Poland’s (NBP) decision to raise its policy rate by a larger-than-expected 75bp to 1.25% alongside the upwards revision to its inflation forecast suggests to us that the NBP is taking the fight against inflation much more seriously than we had thought. With a prolonged period of above-target inflation a serious risk, we now think rates will rise to 2.75% in this cycle (vs. 1.50% previously).
Note: We’re holding a Drop-In on the outlook for Frontier Markets on Thursday at 14:00 GMT. Registration details here.
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