In line with our expectations, compared with March this year, the July NBP macroeconomic projection revised the inflation path for 2026-27 upwards and the economic growth path for 2026-27 downwards. The March, low inflation NBP projection assumed oil market conditions from before the war, which is why the July projection is higher than the previous one.<\/p>\n
The NBP sees inflation in 2027 higher than our forecasts. This is probably related to the cut-off date for the projection, 17 June, the day the preliminary US-Iran agreement was signed. A week before that date, oil was above US$90\/bbl, and two weeks before it was above US$100\/bbl. Therefore, oil price assumptions underlying our and the central bank forecasts may differ.<\/p>\n
The projection points to a possible undershoot of the inflation target in 2028, with inflation averaging 2.4% year-on-year, but the March projection showed a similar picture, at an average of 2.3% YoY.<\/p>\n
According to the NBP, annual average CPI inflation will reach 2.9% in 2026, compared with 2.3% in March, then 2.8% in 2027, previously 2.4%, and 2.4% in 2028, previously 2.3%. GDP growth is expected to be 3.7% in 2026, versus 3.9% in the March projection, 2.8% in 2027, previously 2.9%, and 3.0% in 2028, previously 2.9%.<\/p>\n
However, the March projection painted an optimistic picture of inflation as it did not take into account the US-Iran war and its impact on oil prices. In the current projection, the CPI inflation forecast for 2027 appears too high, which may reflect a greater pass-through of higher energy prices into other prices or a more conservative oil price assumption.<\/p>\n","protected":false},"excerpt":{"rendered":"In line with our expectations, compared with March this year, the July NBP macroeconomic projection revised the inflation…\n","protected":false},"author":2,"featured_media":680839,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-680838","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/680838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=680838"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/680838\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/680839"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=680838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=680838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=680838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}