BUDAPEST (Reuters) - A standoff between Hungary's economy minister and the central bank governor flared up again on Tuesday following a short-lived truce with the minister accusing the bank of being unable to co-operate over economic strategy.

Hungary's central bank, which has slashed borrowing costs by 1,025 basis points to 7.75% over the past year, has faced strong pressure from Prime Minister Viktor Orban's government to cut interest rates more aggressively to help the economic recovery.

The government has also launched various policies, such as caps on corporate and retail lending rates and proposed several measures, which the central bank, led by Governor Gyorgy Matolcsy, a former Orban ally, said would harm its independence.

Economy Minister Marton Nagy, one of Matolcsy's former deputies, rekindled the spat after a short-lived truce since early April, when the two leaders posed for a joint picture in a display of setting their differences aside.

Nagy accused the bank of being unable to cooperate with the government, even though Orban's cabinet tried to find ways to work together, Nagy told news website index.hu in response to central bank criticism of his latest economic reform proposals.

"This shows that the central bank is unable to cooperate, our attempts to do so were in vain," Nagy said, criticising the bank for publishing its concerns first and not discussing them with the government at their regular meetings.

The central bank did not immediately respond to a request for comment.

Matolcsy, whose term expires next March, has been increasingly critical of Orban's policy course since a 2022 election, with the sides trading blame over last year's surge in Hungarian inflation to the highest level in the European Union.

The bank holds a policy meeting later on Tuesday, where a Reuters poll of analysts expects the bank to cut its base rate by another 50 basis points to 7.25%, in line with the bank's latest guidance for a slower pace of easing after steep rate cuts in the past year.

(Reporting by Anita Komuves, editing by Ed Osmond)