Inflation across Central and Eastern Europe (CEE) has surprised to the downside in recent months and is now below central banks’ targets. While we expect inflation to rise by year-end, it will follow a lower path than we had previously thought. In response, we now expect the policy rate in Hungary to be cut from 6.25% to 5.50% by end-2026 (6.00% previously) and in Czechia from 3.50% to 3.25% (previously no cuts). Both of these forecasts are below the consensus. We continue to expect 50bp of cuts in Poland.
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