The National Bank of Hungary kept its key interest rate at 6.50% on December 16, extending its pause for a 15th straight meeting, in line with market expectations. The overnight deposit and collateralized loan rates also remained at 5.5% and 7.5%, respectively. Headline inflation eased to a one-year low of 3.8%, falling within the central bank’s 3% ±1 percentage point target range for the first time in a year. The labor market showed signs of slight weakness, with unemployment rising to 4.6% in October, the highest level since November 2024. Meanwhile, overall economic activity picked up, as the annual growth rate accelerated to its fastest pace since Q2 2024.