MPC Preview: Oil bites. Will SBP bite back?

Ahead of the State Bank of Pakistan’s October 26 policy announcement, a Mettis Global poll found 58.7% of respondents favouring a rate increase from 11.5%. The most common choice was a 50-basis-point rise to 12%, backed by 44.4%; 41.3% expected no change, while no respondent anticipated a reduction.

Oil above $114 a barrel and rising energy costs strengthen the case for tighter policy, while softer core price pressures and a weak industrial recovery argue for caution. September CPI inflation was 10.3% year-on-year, and 55.0% of those surveyed expected FY27 average inflation to exceed 9%. Bond yields have also climbed since the previous meeting, although Mettis Global cautioned that market pricing does not determine the committee’s decision. Its assessment slightly favoured a 50-basis-point increase, with holding the rate still a substantial possibility.