* Hungary, Romania CPI rise in Nov, Slovak CPI at record low
* Hungary, Romania seen easing in 2010, unlike neighbours
* Romania rates seen on hold for now due to politics
* Czech current account shows surplus, defies expectations
By Luiza Ilie
BUCHAREST, Dec 11 (Reuters) - Inflation picked up quicker than forecast in Hungary and Romania on higher fuel and food costs in November, but analysts said they still expected rate cuts next week out of Budapest and later on in Bucharest.
Price growth has fallen steadily across eastern Europe in recent months as high unemployment and tight credit hit consumption but is now ticking up on commodity prices, even though a patchy recovery is squeezing domestic demand.
But analysts said price growth would wield little sway over Romanian and Hungarian interest rates compared with currency concerns and, in the case of Romania, a political deadlock that has already delayed vital foreign aid.
Hungary's annual headline inflation rate
Romanian inflation
"At the moment, inflation isn't the primary driver of interest rates," said Capital Economics' David Oxley.
"Hungary and Romania are still stuck in easing mode. Hungary, like Romania has to keep an eye on what happens on currency markets."
After the data release, Hungarian central banker Andras Simor said the pace of interest rate cuts will depend on risk appetite in global and domestic markets in the near future. [ID:nBUD005198].
Hungary's central bank has cut its main lending rate
While analysts expect Romania's central bank to slash its benchmark rate over the course of next year -- at 8 percent it is the highest in the European Union -- they say it will likely hold fire at its next meeting on Jan. 5.
Romania paused in a 225 basis points rate easing cycle aimed at alleviating a painful recession, after a political crisis toppled a centrist minority government in October and suspended aid tranches from the IMF.
The leu
EASING AHEAD
Oxley said he expected Romanian and Hungarian rates to fall to 6 and 5.5 percent, respectively, at the end of 2010, while Poland and the Czech Republic had probably reached the end of their easing cycles. Other analysts supported his view.
"The figure supports our expectation of further (Hungarian) rate cuts this year, with the easing continuing at a cautious pace in 2010 as well," said Gyorgy Barta, from CIB in Budapest.
Analysts have said Romania high interest rates are stifling economic recovery. Once a major vulnerability, its current account deficit shrank 72.2 percent on the year to 3.95 billion euros in January-October. [ID:nnGEE5BA0SU]. Its economy is expected to contract by up to 8 percent this year.
But a months-long political crisis that has continued after Sunday's presidential election will prompt the central bank to stay put at least until the crisis is resolved with the installation of a new government.
A cabinet, which must be appointed by the president and clear parliament, is key to the International Monetary Fund's demand that Bucharest pass a cost-cutting 2010 budget to unlock its stalled 20 billion euro ($29.45 billion) aid deal.
"The central bank will resume rate cuts once there is political stability," said Volksbank's Melania Hancila.
Meanwhile, Slovakia, which joined the euro zone on Jan. 1, saw its annual inflation remain at an all-time low of 0.4 percent in November. It recorded a foreign trade surplus of 225.3 million euro in October.
The Czech current account showed a 12.41 billion crown ($709.5 million) surplus in October, defying market expectations for an 11.0 billion crown deficit, as exports stabilised while imports continued to fall due to weak domestic demand. (Reporting by Reuters bureaus; Editing by Andy Bruce)