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Core Pressures Will Keep Inflation Elevated Inflation is falling sharply in central and eastern Europe (CEE), but remains well above target. ���������ֳ� does not expect average inflation to return to target on a sustained basis until 2025, according to forecasts in our latest Sovereign Data Comparator, with risks from labour markets, unanchored inflation expectations and premature loosening of monetary policy. Headline Inflation Falling Sharply: Headline rates of inflation in most of CEE are at their lowest since 1H22, with notable falls in yoy terms in September, when inflation in the Czech Republic fell to 6.9% from 8.5% in August; in Poland to 8.2% from 10.1%; and in Hungary to 12.2% from 16.4%. These declines are largely the result of base effects, as higher energy prices drop out of the annual comparison. Further falls are likely as this process progresses and as high food prices ease due to lower international prices eventually being passed through. Underlying Price Pressures Remain: Inflationary pressures are still evident in core measures, however, which are easing more slowly than the headline rate.