(Recasts, adds analyst’s comments, background)
By Anthony Esposito
SANTIAGO, Sept 8 (Reuters) - Inflation in Chile posted its biggest monthly jump in nearly a year in August, pushing the annual figure well above the central bank’s target range and likely mounting pressure on monetary policymakers to hike interest rates sooner rather than later.
The consumer price index rose 0.7 percent in August, above a Reuters forecast as prices for food, non-alcoholic beverages, clothes, footwear, housing and utilities increased, government data showed on Tuesday
A rapid depreciation of the Chilean peso against the dollar, down around 12 percent in the year to date, has fueled inflation, which in the 12 months to August now stands at 5.0 percent, a full percentage point above the central bank’s 2 percent to 4 percent target range.
Core inflation was 0.4 percent in the month.
“Today’s data, combined with a hawkish message in the central bank’s Q3 Inflation Report, suggest that interest rate hikes might come sooner than we had initially expected,” said Edward Glossop, emerging markets economist at London-based Capital Economics.
“Even so, we still do not think that policy tightening is imminent,” Glossop added.
Citing concerns about stubbornly high inflation, the head of Chile’s central bank has said that the bank’s baseline scenario is that it will start raising interest rates later this year.
The August inflation data, coupled with surging prices for Chile’s top export copper, lifted the peso some 1.27 percent against the dollar in opening trade. (Reporting by Anthony Esposito; Additional reporting by Froilan Romero; Editing by W Simon; Editing by W Simon)