CPI was driven by higher cigarette, spirits and vehicle fuel prices, with spirits and tobacco prices rising 11.1%, lifted by an 18.1% increase in tobacco prices.

Prices in the category of goods that includes vehicle fuel grew by 8.6%, as vehicle fuel prices jumped 19.8%.

Food prices were up 3.1%, household energy prices edged 0.4% higher, consumer durable prices rose by 3.8% and clothing prices edged down 0.2%.

Core inflation, which excludes volatile food and fuel prices, was an annual 3.5% in July.

CPI calculated with a basket of goods and services used by pensioners stood at 4.2%. In a month-on-month comparison, inflation was 0.5%.

Analysts told MTI that whereas inflation had slowed somewhat in July, notable inflationary pressures remained.

Péter Virovácz of ING Bank said easing inflation had been largely due to base effects and there was still significant price growth on a monthly basis.

Gábor Regős of Századvég noted that inflation was still above the target band, and inflationary pressures remained, even if more moderately so.

Gergely Suppan of Takarékbank said a cycle of interest rate hikes was needed, and the upside risks from second-round effects linked to commodity prices and re-invigorated demand, as well as wage pressure due to labour shortages, were substantial.

Dávid Németh of K&H Bank said CPI growth was just shy of multi-year highs and it was far from clear that inflationary pressures in the economy had eased.