Hungary’s inflation rate unexpectedly rose to 5.5% in January, the highest level in 13 months. The increase contradicts Prime Minister Viktor Orbán’s earlier assertions that inflation had been brought under control.
The rise was driven largely by higher food prices and more expensive services. As a result, the Hungarian central bank kept its key interest rate at 6.5%—the highest in the European Union—and has delayed any return to its inflation target.
The renewed price pressure is weighing on household budgets and poses a political risk for Orbán ahead of next year’s elections, as voters contend with the impact of climbing living costs.