Hungary's inflation beats expectations, hits 3-year high in October

Hungary's inflation rose more-than-expected to hit a 3-year high in October, data released by the Hungarian Central Statistical Office showed on Tuesday. Inflation rose to 1 percent in October from 0.6 percent in September, beating forecasts for a rise of 0.8 percent. This was the highest since September 2013, when prices advanced 1.4 percent.

Consumer prices were up 0.6 percent on a monthly basis, also higher than expectations for a 0.4 percent growth and compared to September's 0.2 percent rise. Core consumer prices rose 0.2 percent from August and by 1.4 percent year-on-year. During January to October, consumer prices rose 0.2 percent compared to the same period of the previous year.

The main driver of headline CPI was the fuel price increase due to the rise of the excise duty. Imported inflation is still low. On the other hand the market services prices increase gradually which reflects the stable growth of domestic consumption.

Hungarian central bank governor Gyorgy Matolcsy said in an interview that the bank could keep its main base rate at 0.9 percent in the long term even if major central banks start hiking interest rates. Separately, the bank said on its website that underlying indicators still pointed to low inflation pressures.