Higher oil prices to raise CPI over target, but NBH sees no spillover

Inflation could rise slightly over the 3 percent mid-term target in the coming months on the back of sharp increases in global oil prices, but the National Bank of Hungary (NBH) said it expects no spillover effects in an quarterly report published on Thursday. "Inflation expectations are well-anchored; thus the increase in oil prices is not expected to induce second-round spillover effects," the central bank's Monetary Council said in an executive summary prefacing the Inflation Report. "After the temporary, inflation-boosting effect of the oil price change has faded, from mid-2019 the rise in underlying inflation trends will ensure the sustainable achievement of the 3 percent inflation target," the Council said.