Polish CPI shot to 7.8% y/y in November, the annual growth rate picking up 1pp versus the preceding month, statistical office GUS said on December 15.

A 21-year high reading is also 0.1pp higher than the flash estimate, which GUS published at the end of November. Surging consumer prices have so far pushed the National Bank of Poland (NBP) to raise interest rates three times – in October, November, and December – from 0.1% to 1.75%.

More tightening is in the pipeline, most analysts say, with some expecting the rates to move above 3% in the second half of 2022.

“The NBP is signalling its willingness to deliver further monetary tightening. In 1Q22 we expect one or two hikes by 50 bps. In the second half of 2022, we anticipate further tightening, bringing the reference rate at least to 3% or even higher,” ING said in a comment on the GUS release.

Despite the dynamic growth of energy prices, it was food that drove the November surge, the state-controlled bank PKO BP said of the inflation’s structure.

Food prices increased 6.4% y/y in the eleventh month, compared to a growth of 5% y/y in October, the breakdown of the data showed.

The price of fuel jumped 36.6% y/y in November, adding 2.7pp versus October. Transport prices – of which fuels are a part – grew 24.1% y/y overall, picking up 2pp compared to the preceding month.

Housing and energy prices added 10.7% y/y in November versus 9% y/y the preceding month.

Overall, goods prices went up 8.1% y/y in November after growing 6.8% y/y in October. Services price growth came in at 6.6% y/y, easing 0.2pp.

Core inflation came in at an estimated 4.7% y/y in November from 4.5% y/y the preceding month.

The outlook for inflation assumes that it will peak at over 8% y/y in December before easing thanks to the government’s anti-inflation package. Price growth will remain elevated at around 5% throughout 2022 and will only move back to the upper bound of the NBP’s acceptable range of 3.5% in late 2023 or early 2024, according to PKO BP.

In monthly terms, CPI expanded 01% in November, the growth rate picking up 0.3pp versus October, GUS also said.