Hungary makes shock 185bp rate increase

Central Bank of Hungary
The Central Bank of Hungary
Yelkrokoyade/Wikimedia

The Central Bank of Hungary surprised markets on June 28 with its largest rate rise in 14 years. The 185 basis point increase brought the base rate to 7.75%, its highest figure since 2009.

The increase was well above market expectations – a  Bloomberg survey of economists returned a median prediction of a 50bp increase.

In its press statement, the central bank’s nine-member monetary council listed several, mainly external, factors for its decision. These included a worsening international

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