Polish inflation falls more than expected as core pressures weaken
Per the full note from ING, Polish CPI fell to 3.5% YoY in October versus the bank's own 3.8% call and a 3.7% consensus, a sharper-than-expected deceleration from 4.1% in September that gives the National Bank of Poland room to hold rates despite rising energy-price risks. The surprise is squarely in the core: ING estimates core ex-food and energy slipped below 3% YoY from 3.1%, achieved even against a low base. The composition matters — a 9.7% MoM fuel-price collapse (helped by excise and VAT cuts) drove the headline, while housing energy rose 1.6% MoM on unregulated LPG, coal and pellet costs. ING's forward view is not complacent: it flags a turn higher in food prices from November on poor harvests and expensive fertiliser, and projects inflation holding in a 3.5-4% range through end-2026, testing the top of that band in early 2027. With no scheduled high-impact Polish events in the next 30 days, the data print itself is the catalyst for the PLN complex.
What the desk is arguing
ING's thesis is that disinflation in Poland is real but narrow, and that the soft core print buys the NBP time rather than signalling a renewed easing cycle. The note frames October as a composition story: headline fell to 3.5% YoY (ING 3.8%, consensus 3.7%) from 4.1%, but the driver was a 9.7% MoM fuel-price drop tied to excise duty and VAT cuts, which pulled annual fuel inflation from 31.6% to 21.7% YoY.
The evidence that carries the call is the core estimate — sub-3% YoY from 3.1%, despite a low reference base — which ING reads as the absence of broader inflationary pressure. That is what lets the NBP sit still even as housing energy prices rose 1.6% MoM on unregulated LPG, coal and pellets.
The alternative read is that this is a fuel-tax base effect masking a building food impulse. ING explicitly rejects that complacency: it expects food deflation to end in November and food to become an upward CPI contributor on poorer harvests and costlier fertiliser, keeping inflation in a 3.5-4% YoY range to end-2026 and testing the top in early 2027.
How other firms see it
With no internal coverage data on the relevant currency pair in this bundle, there are no per-firm forecasts to group into aligned or contrary camps here. The note stands as a single-house ING view rather than a cross-firm consensus point.
The intersecting instruments to watch are the PLN complex and the NBP policy path; the core ex-food-and-energy trajectory mirrors the same debate playing out in CEE peer central banks, and energy-base effects are the swing factor across the region.
What the calendar says
No high-impact Polish events are scheduled in the next 30 days, so the next genuine catalyst is the following CPI flash and the monthly core estimate that ING leans on. Until then, the market will trade the gap between the 3.5% headline and the sub-3% core as the signal of whether the NBP hold is durable.
Key takeaways
- 01October Polish CPI fell to 3.5% YoY versus ING's 3.8% and a 3.7% consensus, down from 4.1% in September.
- 02Core ex-food and energy is estimated below 3% YoY from 3.1%, even against a low base — the biggest surprise in the print.
- 03A 9.7% MoM fuel-price drop (excise and VAT cuts) drove headline; annual fuel inflation fell to 21.7% from 31.6% YoY.
- 04ING sees inflation at 3.5-4% YoY through end-2026, testing the upper band in early 2027 on food and energy risks.
- 05The NBP can hold rates steady now, but food-price reflation from November is the key watch item.
Market implications
Watch the monthly core ex-food-and-energy estimate as the leading signal — a sustained sub-3% reading keeps the NBP on hold and supports PLN carry, while any upward revision flips the narrative back to energy-risk premium. The 3.5-4% headline band is the range to trade against; a move through the top in early 2027 would likely force a repricing of the NBP path.
Risks to this view
The call is invalidated if food prices reflate faster than ING expects from November, or if unregulated energy costs (LPG, coal, pellets) spill into broader core. A reversal of the fuel-tax cuts, or a sharper energy shock, would push headline toward and through the top of the 3.5-4% range and force the NBP back into a tightening bias.
Older quick take Quick take Published 09:55 Poland Polish inflation falls more than expected as core pressures weaken Polish CPI inflation fell more sharply than expected to 3.5% YoY in October, helped by a steep drop in fuel prices. Core inflation surprised on the downside, giving the National Bank of Poland time to hold rates steady despite mounting risks from energy prices, as there are no signs of broader inflationary pressure in the economy so far Poland’s CPI inflation declined to 3.5% YoY in October (ING: 3.8%; consensus: 3.7%) from 4.1% YoY in September. The drop in inflation was supported by another round of cuts in excise duty and VAT on fuels, which contributed to a 9.7% MoM fall in fuel prices.
As a result, annual inflation in this category of the CPI basket declined to 21.7% YoY from 31.6% YoY a month earlier. At the same time, housing energy prices rose by 1.6% MoM, which in our view reflected higher prices for solid and liquid fuels not subject to regulation, including LPG, coal and pellets. The October data bring us closer to a change in the trend in food prices.
Following food price deflation between June and October, we are likely to see prices start rising again from November. In our view, the coming months and quarters will bring a marked increase in food prices due to poorer harvests and more expensive fertilisers, making this category an upward contributor to CPI inflation. The biggest surprise in the October CPI flash estimate comes from prices in the core categories.
We estimate that core inflation excluding food and energy prices fell below 3% YoY in October from 3.1% YoY in September, despite a low reference base from October last year, when core inflation rose by just 0.1% MoM. Headline inflation at the upper end of the CPI target range CPI inflation, % YoY Source: GUS "> Source: GUS We estimate that inflation will remain in the 3.5-4% YoY range until the end of 2026 and could test the upper end of that range in early 2027. One important factor for inflation at the beginning of next year will be how long the CPN programme remains in place, as it is currently scheduled to run until December.
Our baseline inflation scenario assumes that the programme will be extended until the end of February 2027. We will also soon learn about the Energy Regulatory Office's (URE) decision on 2027 tariffs. Conditions in the gas market pose a risk of a marked increase in regulated gas prices, although the government has said it will introduce measures to shield households.
We assume that the prolonged energy crisis, the mounting risk of price pressures becoming more widespread and monetary policy tightening by major central banks will eventually force the National Bank of Poland (NBP) to signal its readiness to tackle inflation risks. At the same time, however, the structure of October’s price increases, with more expensive energy but no pressure on core inflation, gives the Monetary Policy Council time before it needs to respond. We expect NBP interest rates to remain unchanged next week and until the end of 2026, but see two 25bp rate hikes in 1Q27.
NBP rates CPI inflation Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Author Adam Antoniak Senior Economist, Poland Older quick take
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