Inflation remained unchanged in August

Annual core inflation eased from 4.0% in June to 3.9%, marking the lowest level in four years. Within the consumer basket, food products – which account for more than 30% of the weight – saw no price changes in August after a 0.3% increase in July. Fuel prices fell by 0.8%, broadly in line with expectations. Household energy prices stagnated, matching previous forecasts. Alcohol and tobacco prices rose by 0.6%, while durable goods saw an unexpected 0.4% increase despite the stronger forint. In services, the 1% monthly rise in July was followed by a 0.5% increase in August.

The inflation figure was unsurprising but remains outside the central bank’s target range. On the positive side, core inflation continued to decline. Annual food inflation stayed just below 6%, its lowest level this year, while service prices also hovered near a three-year low. Within food, fruit prices rose the most month-on-month, though the pace of annual growth in dining-out costs (counted under food by the HCSO) continued to moderate. According to government announcements, margin-control measures will remain in effect until the end of November, preventing sharp food price spikes. Due to the inflationary impact of their eventual removal, it is likely that these measures could stay in place until 2026.

In the coming months, data are expected to remain volatile due to base effects. After temporary summer disinflation, inflation may rise again to around 4.5% in autumn, before easing back toward 4% by December. For 2025, MBH Bank continues to forecast an average inflation rate of 4.5%, and 3.8% for 2026. Given current data and persistently high household inflation expectations, there is no room for central bank rate cuts this year.