The National Bank of Hungary kept rates unchanged at 6% earlier today, as expected, bringing to an end a short-lived tightening cycle that had spanned three months. Inflation is likely to slow over the course of this year and could fall back to target by as soon as Q3. But with the government apparently stalling on plans to reform the public finances, the scope for rate cuts will remain limited – despite the fact that Hungary’s economic recovery is already showing signs of slowing.