UPDATE 1-Brazil inflation nears 10 pct in year to mid-October
(Adds table, data and market reaction) By Silvio Cascione BRASILIA, Oct 21 (Reuters) - Brazil's annual inflation rate approached 10 percent in mid-October after gasoline, food and cooking fuel prices rose, complicating efforts to lift the country out of its worst recession in decades. Consumer prices gained 9.77 percent in the 12 months through mid-October, the highest rate since December 2003 and far above the government's target of 4.5 percent, government statistics IBGE said on Wednesday. Inflation stood at 9.57 percent in mid-September. On a month-on-month basis, the IPCA-15 index rose 0.66 percent in the month to mid-October, up from 0.39 in the previous month. The index had been expected to rise 0.68 percent, according to the median forecast in a Reuters poll. Prices of cooking gas and gasoline rose 10.2 percent and 1.7 percent in the month to mid-October after state-run Petroleo Brasileiro SA raised fuel prices to adjust for a massive currency drop.. The hikes were the latest in a series of increases in government-regulated prices and taxes this year to help narrow a swollen budget deficit. Food prices also climbed sharply, with an increase of 0.62 percent from mid-September. Taken together, the battery of price rises and levies has crimped consumer demand, contributing to a recession seen at about 3 percent this year. High inflation also makes it difficult for the central bank to cut interest rates to stimulate the economy. Indeed, yields on interest rate futures rose after the mid-October data were published <0#DIJ:>, but not as much as to suggest traders changed bets on the outcome of a central bank rate-setting meeting later on Wednesday. All the 48 economists polled by Reuters last week expect the benchmark Selic rate to remain unchanged at a nine-year-high of 14.25 percent. Below is the result for each price category: October September - Food and beverages 0.62 -0.06 - Housing 1.15 0.68 - Household articles 0.12 0.36 - Apparel 0.58 0.36 - Transport 0.80 0.78 - Health and personal care 0.55 0.50 - Personal expenses 0.56 0.51 - Education 0.17 0.24 - Communication 0.08 0.01 - IPCA-15 0.66 0.39 (Reporting by Silvio Cascione Editing by W Simon)
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