BUDAPEST, Aug 10 (Reuters) – Czech annual headline inflation accelerated to 3.4% in July, the highest since February 2020, strengthening expectations of interest rate hikes ahead as the central bank tries to curb price pressures amid a fast economic recovery.

Hungary’s headline inflation slowed to 4.6% in July from 5.3% in June, mainly thanks to base effects, but prices still rose 0.5% from June, indicating strong underlying price pressures and underpinning likely further rate increases by the National Bank of Hungary.

Central and eastern European countries have faced some of the strongest price pressures in the European Union as their economies come out of the coronavirus pandemic. This has triggered the EU’s first post-pandemic rate hikes in Hungary and the Czech Republic in June.

The two hawkish central banks then raised rates again in July and August, respectively, and promised more hikes to come.

Peter Virovacz, an analyst at…

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