Inflation expectations edge higher

On the radar

• Today Romania will release its August current account balance.
• Romania will release August industrial production at 8:00 CET.
• Slovakia will release September CPI at 9:00 CET.
• Croatia will release final September CPI today.
• Poland CPI inflation y/y was 0.1pp higher compared to flash estimate (4.1 vs. 4) but m/m was confirmed.
• Poland’s latest trade figures showed a deficit of PLN 27.9bn.
• In Slovakia, average gross monthly wages rose by 3.2% y/y.

Economic developments

Today, we look at consumer price expectations across CEE over the July-September 2026 period. The European Commission survey shows that expectations moved higher over these three months. For instance, the EU27 balance increased from 29.2 in July to 33.9 in September, while the CEE8 average rose from 28.4 to 32.7. Within this period, however, the timing of the increase differed. In CEE, most of the rise took place in August, with the regional average being generally stable in September. The rebound over July-September came against the due to renewed geopolitical tensions and higher oil prices. Across CEE, expectations increased most visibly in Slovenia and Poland, although rises were also recorded elsewhere in the region. For central banks, this renewed increase merits close monitoring, as higher household inflation expectations strengthen wage demands and feed into price-setting behavior, reinforcing inflation persistence. While expectations remain well below the levels seen in spring, their rise since July shows that part of the earlier improvement has reversed, keeping inflation expectations relevant for the near-term monetary policy outlook especially for countries like Poland.

Market movements

In Poland, September inflation was confirmed at 4.1% y/y, while MPC member Masłowska said a 2026 rate hike could not be ruled out if price pressures remain elevated. We still expect renewed fuel-price measures to keep headline inflation below 4% through year-end and therefore see no hike as the baseline. Nevertheless, Polish 10Y yields rose 7bp on the week to 6.34%, reflecting somewhat firmer rate expectations. The Finance Ministry also sold PLN 12bn of bonds, at the top of its planned range, and said 2026 borrowing needs were now fully financed. Hungary moved in the opposite direction, with the forint the strongest regional currency on the week and 10Y yields falling 25bp to 5.45%, supported by more constructive signals around future EU funding and reduced near-term financing concerns. Meanwhile, Slovakia’s 2027 budget targets a general government deficit of 4.94% of GDP, underlining delaying fiscal consolidation and keeping fiscal risks firmly in focus across the region.

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