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UPDATE 1-Hungary c.bank head, deputies again outvoted in Sept cut

* Second reduction in a month brought rates to 6.5 pct

* Further easing depends on market conditions, CPI outlook

* Rate-setting panel next meets on Oct. 30

(Adds detail)

BUDAPEST, Oct 10 (Reuters) - Hungary's central bank governorand his two deputies were outvoted by newer monetarypolicymakers for the second time running when the bank cutinterest rates on Sept. 25, minutes of the meeting showed onWednesday.

The quarter-point cut in the bank's base rate to 6.5percent was backed by the four rate setters appointed last yearby parliament, where Prime Minister Viktor Orban's conservativeFidesz party holds a two-thirds majority.

"Members agreed that a further reduction in interest ratescould occur if financial market sentiment continued to improveand the medium-term upside risks to inflation remainedmoderate," the minutes of the meeting showed.

The phrasing again underscored the deep split between thefour newer members and the three others, Governor Andras Simorand his deputies appointed in 2007 by a Socialist government,who have voiced concern over risks to inflation and the forint.

"Others argued in favour of keeping the base rate unchanged,referring to high underlying inflation and the structuralproblems of the real economy," the minutes said.

Analysts polled by Reuters expect annual price growth tohave accelerated to 6.4 percent in September from 6 percent inAugust. The September data will be published on Thursday.

The minutes said some members took the view that easingmonetary conditions would not provide a boost to the economy dueto the existing structural problems.

The bank's Monetary Council will hold its next rate-settingmeeting on Oct. 30.

Three of the four policymakers backing the September ratecut told Reuters after the meeting that a cautious rate-cuttingcycle was now under way to help the recession-hit economy andthat the bank was still targeting inflation.

The trio presented a united front in an interview withReuters to dismiss criticism that the bank had abandonedinflation-targeting or that it had succumbed to politicalpressure by twice cutting rates despite rising inflation.

The three - Andrea Bartfai-Mager, Ferenc Gerhardt and GyorgyKocziszky - maintained that inflation pressures were moderateand that the bank could reach its 3 percent inflation target inthe first half of 2014.

(Reporting by Gergely Szakacs; Editing by Hugh Lawson)

((gergely.szakacs@thomsonreuters.com)(+36 1 327 4748)(ReutersMessaging: gergely.szakacs.thomsonreuters.com@reuters.net))

Keywords: HUNGARY RATES/