London economists predict today’s CPI number will be zero

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Hungary’s headline year-on-year consumer inflation is likely to have accelerated to around zero in the last months, as inflation was driven especially low last year due to utility price cuts, London-based emerging markets economists said ahead of today’s data release of consumer price figures, according to MTI. 

The CPI has been in negative figures for much of the year. Forecasts by the London analysts ranged narrowly between -0.1% and +0.1%, with the consensus averaging at 0.0%. Economists at Morgan Stanley said they expect inflation to have moved to +0.1% in October after a -0.4% drop in September.

They said this is expected to be the first of three large sequential rises in inflation that should take the real policy rate to around zero by year-end, with year-on-year CPI likely to come in at 1.3% in December.

“It is worth keeping in mind that the (Hungarian National Bank) has been preparing the market for negative real interest rates and that this rise in inflation is well anticipated by analysts, so it should not create large surprises,” Morgan Stanley’s London-based analysts added, according to MTI.

At the opposite end of the narrow forecast range, JP Morgan’s economists said they expect a -0.1% year-on-year headline reading from last month, MTI said. This would still be an acceleration compared to September.

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