Hungarian MPC still dovish, but tide may be slowly turning

The statement accompanying today’s MPC meeting in Hungary continued to strike an extremely dovish tone but, reading between the lines, it does seem that the rhetoric is gradually starting to shift. Our base case is that a rise in inflation next year will cause this stance to shift further, with the MPC ultimately beginning to tighten policy later in 2018. But there’s still a real risk that monetary conditions are kept too loose for too long.