The National Bank of Poland is expected to lower interest rates to 4.75% according to a Reuters poll. Inflation fell within the bank’s target range, leading to this decision. The bank had previously cut rates in July and May after keeping them steady since 2013.

Analysts predict a 25 basis point rate cut on Wednesday, despite higher fiscal risks and uncertainty over future electricity prices. Poland raised its 2025 deficit forecast due to high spending on defense, welfare, and debt servicing. The decision on rate cuts remains uncertain due to inflation risks.

Poland’s electricity price cap for households expires in October, posing an inflation risk. President Nawrocki vetoed a bill that included an extension of the freeze, calling it government “blackmail.” Analysts suggest gradual rate cuts every two months even if rates remain unchanged in September.

Read more at Yahoo Finance: Polish central bank seen cutting key rate by 25 bps on Wednesday: Reuters poll