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Marsh gross wages up 8.4% y/y in Hungary

Hungary's Central Statistical Office on Thursday said that gross average wages rose by 8.4% year on year in March, reducing the chances of an interest-rate cut at the upcoming central bank meeting.

Private sector wages grew by 10.2% while public sector wages grew by 5%, the office said. However, real wages dropped by 7% in the Q1. Analysts warned that the high gross growth could negate the positive effect of a drop in inflation. “With gross wage inflation shooting, it is going to be extremely difficult for the bank to sanction a rate cut at Monday's policy meeting,” Nigel Rendell of Calyon Bank in London said. The statistical body last week said that inflation had come down to 8.8%, from a peak of 9%, that was brought on by a government austerity package. With interest rates at 8% to combat the inflationary pressure, some analysts were predicting a possible rate cute at next Monday's monetary policy council meeting at the central bank. (