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Annual inflation in Hungary dropped to 4.4% in February from 4.7% in the previous month, the Central Statistical Office (KSH) said. Food prices were up 7%, while the prices of spirits and tobacco products, lifted by tax changes, rose by 7.3%. Service prices increased by 3.8%. Core inflation, which excludes volatile fuel and food prices, was 4.1%. Month on month, prices rose by 0.3% in February. In a monthly analysis released after the publication of the KSH data, the National Bank of Hungary (NBH) attributed the slowdown in inflation mainly to a moderation of the rise in vehicle fuel prices. In January, vehicle fuel prices jumped by 13.5%. The NBH’s measure of core inflation excluding indirect tax effects – a bellwether indicator of underlying inflation – was 3.8% in February, edging up from 3.7% in the previous month. The central bank’s indicator for demand-sensitive inflation, which excludes processed foods from core inflation, rose to 3.3% from 3.2% in January. The indicator for sticky price inflation, which includes items for which retail prices vary, on average, no more than 15% a month, was unchanged at 3.4%. The NBH said households’ inflation expectations “continued to be moderate” in February, “at a level consistent with the 3% inflation target”.