NBP set to cut rates, but not very far

There has been a marked dovish shift on the Polish National Bank’s (NBP’s) MPC and it now looks like interest rate cuts will come this year, rather than in 2026 as we'd previously thought. But we think this will be another punctuated cycle of interest rate cuts, rather than a long sequence of cuts, most likely taking place in Q3. We’ve pencilled in 50bp of cuts this year (to 5.25%) this year; market expectations for the policy rate to be cut to around 4.50% by the end of the year look too aggressive.