LowIV Macro Policy & Sovereign Debt21 October 2026, Wednesday
Russian household inflation expectations ease to 13.2% before rate decision
Russian households' 12-month inflation expectations fell from 14.2% to 13.2% in October, according to an InFOM survey cited by the state agency TASS. Five-year expectations rose from 10.7% to 12.2%. The Bank of Russia announces its rate decision on 23 October.
According to TASS on 21 October, the survey was conducted for the central bank between 5 and 15 October among at least 2,000 adults. Expectations among people with savings fell from 12.8% to 11.6%, and among those without savings from 15.4% to 14.6%. Perceived inflation also eased, from 15.1% to 14.5%. As of 21 October the October release could not be verified on the bank's own website, so the figures rest for now on the state agency's report.
September's data pointed the other way. On 29 September the central bank said expectations had climbed from 13.7% in August to 14.2%, above their 2024–2025 levels. Official inflation runs far lower: Interfax reported that annual inflation rose to 6.35% in September, above the 6.26% analysts expected. Deputy Governor Zabotkin said on 14 October that third-quarter inflation had come in slightly above forecast. He added that this would feed into the forecast revision on 23 October.
In the central bank's macroeconomic survey of 32 economists, conducted on 9–13 October, the median forecast for end-2026 inflation is 7.1%. The same survey puts the expected average policy rate at 14.6% for 2026 and 12.8% for 2027, with 2026 growth seen at 0.6%. The one-point fall in near-term expectations is a data point in favour of a cut. The 1.5-point rise in five-year expectations, however, suggests households see price increases as persistent.
Talay assessment
Bottom line
The fall in near-term expectations to 13.2% gives the central bank narrow room for a cut ahead of 23 October. But five-year expectations rising to 12.2% and third-quarter inflation overshooting the forecast show that the persistence risk has not passed. The most likely path is that the bank holds rates and revises its inflation forecast upwards.
Likely effects
- Rouble and domestic debtUncertainWeeks
The easing in expectations strengthens pricing for a cut; if no cut comes, domestic bond yields will stay high.
- Growth and budgetNegative1–6 months
Economists expect 2026 growth of 0.6%; tight rates combined with weak growth will keep tax revenues under pressure.
- Inflation persistenceNegative6 months+
The rise in five-year expectations from 10.7% to 12.2% suggests households regard price increases as lasting.
Possibilities, ranked
- 1Rates on hold, forecast revised up55%
The bank leaves rates unchanged and raises its 2026 forecast, citing the third-quarter overshoot.
Watch: The 23 October decision and the revision of the 2026 inflation forecast range
- 2Modest cut35%
The bank makes a small cut, pointing to the fall in near-term expectations.
Watch: Any reference in the 23 October statement to lower household expectations
- 3Tightening signal10%
The bank highlights the budget deficit and five-year expectations and puts tightening back on the table.
Watch: An explicit reference to possible tighter policy in the decision statement
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- 12-month expectation▲ 13.2%
- 5-year expectation▼ 12.2%
- Perceived inflation▲ 14.5%
- Annual CPI (Sept)▼ 6.35%
Sources
- TASS (state agency) — Inflation expectations in Russia drop to 13.2% in October from 14.2% in September
- Bank of Russia — Inflation expectations rise in September
- Bank of Russia — Macroeconomic survey of the Bank of Russia
- Interfax — CBR deputy governor Zabotkin on Q3 inflation and October forecast revision