In a report highlighting key findings of a recent trip to Hungary, released to investors in London, analysts at Royal Bank of Scotland (RBS) said that even “the central bank has been taken by surprise” with the latest inflation prints and “will feel warranted in cutting rates below the 3% mark”.
With another 11% of utility price cuts in November, “we foresee 1% being shaved from headline inflation, leaving Hungary at risk of deflation […] We now expect another 100 bp of rate cuts [by the MNB] over the next five meetings in 20 bp increments, down to 2.4%.”
“One of our key takeaways from the meetings in Hungary was that the terminal policy rate range of 3% to 3.5% given by [MNB governor György] Matolcsy back in the summer no longer carries much weight given the inflation undershoot … The range was referred to [during the talks in Budapest] as a flexible band which can fairly easily be breached,” RBS analysts reported.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
