Poland signals first rate hike since 2022 as two MPC members eye December

A hawkish turn gathers pace

Poland is lining up its first rate increase since 2022 after two Monetary Policy Council members said a move could arrive soon and even in December. Henryk Wnorowski and Marcin Zarzecki's comments mark a more hawkish tilt, aligning with recent increases across euro-area rates and a move by the neighboring Czech Republic as Europe absorbs energy costs lifted by the war in the Middle East.

That contrasts with Governor Adam Glapinski's message earlier this week, when he pointed to early 2027 as the likely timing for lifting the 3.75% benchmark. Wnorowski and Zarzecki sketched a faster timeline to blunt second round effects from higher fuel prices.

What policymakers actually said

Wnorowski warned that some disinflation supports are fading. "In addition to uncertainty surrounding commodity prices, we are slowly running out of the factors that have so far helped us combat inflation, such as food prices and a strong zloty," he said. He added, "Based on November projections, the likelihood of interest rate hikes in December is significant and in January it is high." He expects a 25 basis point increase either next month or in January and said there was "absolutely no talk" this week about launching a tightening cycle.

According to Zarzecki, the odds of a rate "hike early next year has increased significantly," and he also isn't excluding a decision as soon as next month. While officials, including Glapinski, often say December decisions are uncommon, the record shows otherwise. Despite assertions from officials, including Glapinski, that December moves are rare, history contradicts them: in 2025, 2021, 2012 and 2008, the MPC changed the benchmark during its final meeting of the year.

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Inflation, the zloty and the projection path

Poland, like other energy importers, is dealing with renewed price pressure. Inflation reached 3.5% in October, the top of the MPC's tolerance band, despite the government bringing back fuel price caps. The forecast assumes the government's fuel price shield is not extended beyond 2026.

Wnorowski said he is not concerned about the current zloty level. By midday Friday, the currency traded around 4.396 per euro, up from a three year low of 4.4372 earlier in the week. Still, the zloty has lagged most emerging market peers this year, down 4.1% versus the euro and 8.8% against the dollar.

Why it matters for your portfolio

Rate expectations are now split. The governor flagged 2027 for the next step higher, while two MPC members see a case to move sooner to contain fuel driven spillovers. If inflation does rise to 4.6% during the first half of next year and the zloty stays soft, the debate likely heats up. For investors with exposure to Polish assets, watch the December and January meetings and the policy on the fuel price shield, since both feed into the inflation path and the timing of rate changes.

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