Wire service Reuters conducted an October survey where analysts opted for either the one or the other. The Monetary Council will surely see September inflation data in a good light, for it slowed to 6.4 percent from 8.3 in August. Core inflation was 4.3 percent as against August’s 5.4. In addition, the forint held its own against the euro, at about 251 forints to one euro, all factors that could induce a rate cut.
However, wage data showing that increases were down from July’s 11.2 percent to 10.4, only looked good if one ignored the very high base of one year ago. Wage negotiations for 2008 are still very much underway and will not conclude before the council meets, which is an incentive for leaving rates untouched.
A different survey, involving 15 Hungarian monetary experts, found 11 of them predicting a 25-base-point cut. They argue that the market has already factored in a rate cut and the move would not upset the forint on short term.
The central bank last cut rates on September 24, when a quarter-percent reduction set the benchmark at 7.50 percent.