UPDATE 1-Brazil annual inflation hits 10-year high in February
(Adds table, details) By Silvio Cascione BRASILIA, March 6 (Reuters) - Brazil's annual inflation rate rose more than expected in February to the highest in nearly 10 years, drifting further away from the central bank's goal despite aggressive interest rate hikes and sputtering economic growth. Consumer prices as measured by the benchmark IPCA index rose 7.70 percent in the 12 months through February, government data showed on Friday. That was the highest rate since May 2005 and well above the government's 4.5 percent inflation target. On a monthly basis, the IPCA index rose 1.22 percent from January, little changed from an increase of 1.24 percent in the previous month, statistics agency IBGE said, as rising taxes and school fees kept upward pressure on prices. The result, which topped even the most pessimistic of 28 forecasts in a Reuters poll, shows the unpopular shock therapy of steep interest-rate hikes and budget cuts under President Dilma Rousseff has yet to take effect on inflation. The central bank, which has pledged to do "whatever is necessary" to lower inflation back to its 4.5 percent target next year, raised interest rates for a fourth straight time this week to 12.75 percent. The bank hinted at further rate hikes in coming months even as job losses mount in what appears to be the worst recession in a quarter century, according to private estimates. Gasoline prices jumped 8.4 percent from January after Finance Minister Joaquim Levy raised fuel taxes to plug a growing budget deficit. Education costs also climbed, 5.9 percent, as institutions raised tuition fees at the start of the school year. Food prices slowed their pace of increase in February, rising 0.81 percent from the previous month. Below is the result for each price category: February January - Food and beverages 0.81 1.48 - Housing 1.22 2.42 - Household articles 0.87 -0.28 - Apparel -0.60 -0.69 - Transport 2.20 1.83 - Health and personal care 0.60 0.32 - Personal expenses 0.86 1.68 - Education 5.88 0.31 - Communication -0.02 0.15 - IPCA 1.22 1.24 (Additional reporting by Rodrigo Viga and Walter Brandimarte in Rio de Janeiro; Editing by W Simon and Chizu Nomiyama)
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