NBP takes its head out of the sand with large rate hike

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.