Gergely Gulyás, the head of the Prime Minister's Office, said at a weekly press briefing on Thursday that the government may have to raise pensions by around 1.3pc in November to match the rate of inflation.

Gulyás said that the government calculated an average annual inflation of 4.5pc in 2025. He said the government had allocated over HUF 90bn for the the resulting inflation-linked top-up which is required by law.

The 1.3pc pension rise in November translates as HUF 39,600, in absolute terms, for the average pension, Gulyás said.

He said that Mihaly Varga, the National Bank of Hungary's new governor, had presented the central bank's latest forecasts at the cabinet meeting. The central bank puts average annual inflation at "at least" 4.5pc in 2025, he added.

Gulyás said inflation could be better than expected with the rollout of a government-mandated cap on markups of some basic foods. The new measure has cut prices of 874 products by 17.5pc on average, he added.