The National Bank of Ukraine kept its key policy rate at 15.5% during its October meeting, maintaining borrowing costs at the highest level since November 2023, as inflation expectations remained elevated and inflationary risks increased, particularly due to larger energy shortages and rising budgetary needs. Consumer inflation slowed to 11.9% year-on-year in September, down from 13.2% in August, and policymakers expect this trend to have continued in October. Nevertheless, inflation remains well above the central bank’s 5% target, with underlying price pressures persisting and core inflation easing only gradually. Inflation expectations among most surveyed groups showed little improvement over the past quarter, reflecting the ongoing impact of the war. Looking ahead, the central bank expects to begin interest rate cuts in Q1 2026, but warned that the timeline could be delayed if pro-inflationary risks intensify or underlying price pressures remain significant.