BUDAPEST - The National Bank of Hungary is likely to extend its cycle of rate hikes with a 20-basis-point increase in its base rate to 1.1% next Tuesday after higher-than-expected inflation data, a Reuters poll of analysts showed.

The NBH raised its base rate by 30 basis points to 0.9% last month, becoming the first in the European Union to launch a cycle of rate rises to combat growing price pressures amid a faster than expected recovery from the COVID-19 pandemic.

The consensus forecast of 18 economists in a July 19-21 Reuters poll sees the NBH following up last month's rate rise with a 20-basis-point increase NBHI , with tightening bets ranging from 15 basis points to 30 basis points.

Headline inflation accelerated to an annual 5.3% in June from 5.1% in May, its highest in nearly a decade, while the NBH's preferred price gauge, tax-adjusted core inflation, also increased to 3.8% year-on-year.

"The large upside inflation surprise in June is also creating risks for the NBH to decide to front-load the hiking cycle, but we think that the central bank would prefer to maintain a steady pace of tightening on the back of the upcoming significant inflation deceleration in July," economists at Morgan Stanley said in a note.

Deputy Governor Barnabas Virag said early this month that next week's meeting would be crucial with respect to the size of future rate rises as the bank looks to rein in price surges.

"Given the (NBH's) communication, as well as higher inflation data than we had expected, we are revising our forecast for more near-term tightening," economists at Goldman Sachs said in a note.

"Previously, we expected an additional 15bp of rate hikes this quarter, but now project the (NBH) to hike by 30bp in the next July 27 MPC meeting."

The NBH projects average inflation at 4.1% this year, above the top end of its 2%-4% target range, returning to its 3% policy anchor sometime around mid-2022 thanks to policy tightening.

However, the poll sees average inflation even higher, at 4.4% this year, easing to 3.4% next year and 3.2% in 2023.

Economists have also raised their bets for future rate tightening, projecting the base rate to reach 1.5% by the end of this year and 2% by the end of 2023, up from 1.05% and 1.5%, respectively in last month's survey.

(Reporting by Gergely Szakacs Editing by Mark Heinrich) ((gergely.szakacs@reuters.com ; https://twitter.com/szakacsg ; +36 1 882 3606 ; https://www.reuters.com/journalists/gergely-szakacs))