Both central banks have shifted their policy into neutral after sharp rate-hiking cycles between 2021 and 2022. But with inflation still in double digits - and above 20% in Hungary's case - rate setters have sought to cool expectations of rate cuts coming quickly, even if economies slow. The impact of strong inflation and high energy costs on households in the region has been seen in Czech retail activity, with a further 4.6% year-on-year decline reported in February, statistics office data showed on Wednesday. Retail sales have been falling each month since last May. "The preference of households is clear: pay increased costs and save money on the rest," Banka Creditas economist Petr Dufek said. "Until the income situation for Czech households turns around and improves in real terms, retail is in for a few leaner months."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Hungary's industrial output Czech retail sales ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Jason Hovet in Prague and Gergely Szakacs in Budapest)