UPDATE 1-Brazil's inflation picks up in August, remains at target ceiling
(Adds details, background throughout) By Silvio Cascione BRASILIA, Sept 5 (Reuters) - Brazil's monthly inflation rate picked up speed in August and remained stuck at the upper limit of the central bank's target for the third straight month, giving little room for any government measures to pull the economy out of a recession. Consumer prices in Brazil rose 0.25 percent in August from July, compared with a 0.01 percent rise in the previous month, according to government data released on Friday. The number matched the median estimate in a Reuters poll of 25 analysts. As a result, trailing 12-month inflation edged up slightly to 6.51 percent in August from 6.50 percent in July , at the upper limit of the official target range. Stubbornly high inflation is one of Brazil's biggest economic problems. It has eroded business and consumer confidence, held back investments and prompted the central bank to lift interest rates earlier this year to 11 percent , a more than two-year high. In a policy-setting meeting earlier this week, the bank suggested high inflation would prevent it from using interest rate cuts to stimulate the economy. Inflation has also dented President Dilma Rousseff's popularity in the run-up to October's presidential election. Recent polls showed Rousseff failing to win a second term as popular environmentalist Marina Silva promises a more market-friendly economic policy. August's inflation increase stemmed mainly from higher electricity rates in many cities. Energy rates are one of the several government-regulated prices that economists say will probably rise in coming months, preventing Brazil's 12-month inflation rate from falling below 6 percent. Housekeepers' salaries also rose sharply in cities such as Rio de Janeiro and Sao Paulo. Although the job market has showed signs of cooling in recent months, salaries in many sectors continue to rise above inflation. Food prices fell for the fifth straight month, dropping 0.15 percent from July. Transportation costs rose 0.33 percent, led by higher airfares. The central bank targets inflation at 4.5 percent, with a tolerance margin of 2 percentage points. Brazil's government only includes the first decimal point in its measure. Below are the results for each price category: August July - Food and beverages -0.15 -0.15 - Housing 0.94 1.20 - Household articles 0.47 0.86 - Apparel -0.15 -0.24 - Transport 0.33 -0.98 - Health and personal care 0.41 0.50 - Personal expenses 0.09 0.12 - Education 0.43 0.04 - Communication 0.10 -0.79 - IPCA 0.25 0.01 (Reporting by Rodrigo Viga Gaier and Silvio Cascione Editing by W Simon and Lisa Von Ahn)
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