Polish Core CPI confirms March cut was one-and-done

The monthly print was also firm, rising 0.9% MoM against expectations for 0.8%.

This is not a dramatic inflation shock, but it is a clear policy signal: the March rate cut now looks increasingly premature, as we noted earlier.

The detail strengthens that conclusion. Headline CPI had already rebounded to 3.2% YoY in April, but the core print shows the move was not solely due to food and energy noise. Inflation excluding food and energy has now returned to 3.0% YoY, while the 15% trimmed mean also rose to 3.0% YoY from 2.9%.

That points to broader underlying price pressure, not just a single volatile component.

For the MPC, this makes renewed easing very difficult to justify. The growth backdrop still argues against an urgent tightening cycle, especially after Q1 GDP slowed to 3.4% YoY from 4.1% YoY. But the economy is not weak enough to justify another cut, while inflation is no longer soft enough to sustain an easing bias. The most likely policy path is now a prolonged defensive pause, with the July inflation projection becoming the next major anchor.

For PLN, the print is supportive. EURPLN around 4.24 already reflected the view that the March cut would remain isolated, but today’s data confirm that narrative. The zloty does not need immediate rate-hike pricing to perform; it only needs the market to accept that rate cuts are off the table.

A softer print would have reopened the debate, but a 3.0% YoY core reading closes it for now.

That means that April's core CPI confirms that Poland’s disinflation phase has stalled. The data do not force a near-term rate-hike call, but they do confirm that the March cut was one-and-done and that PLN support rests on a prolonged NBP pause.

Author:

Barry van der Laan MBA, Senior FX Market Strategist

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