UPDATE 1-Brazil inflation climbs to near 10 pct, highest since 2003

viernes 6 de noviembre de 2015 07:51 GYT

(Adds inflation drivers, market reaction)
    BRASILIA, Nov 6 (Reuters) - Brazil's annual inflation rate
accelerated in October to just below 10 percent, the highest
reading in almost 12 years,  after sharp fuel and food price
   Consumer prices, as measured by the benchmark IPCA index
, rose 9.93 percent in 12 months through October, up
from 9.49 percent in September, statistics agency IBGE said on
Friday. The number, which was the highest since November 2003,
came slightly above a median 9.91 percent forecast in a Reuters
    On a monthly basis, the IPCA index rose 0.82
percent, up from an increase of 0.54 percent in September.    
    A government-led increase in fuel prices that
state-controlled oil producer Petróleo Brasileiro SA 
recently implemented was responsible for about a third of the
month's inflation, IBGE said. Petrobras, as the company is
known, raised gasoline and diesel prices by 6 percent and 4
percent, respectively.
    Food prices also gained traction, led by rising costs for
poultry, sugar and beverages.
    Brazil's annual inflation is running at more than double
official target of 4.5 percent, partly because of a string of
tax and government-controlled price increases earlier in the
    Accelerating inflation is also taking a toll on economic
activity, as Brazil braces for its steepest recession in a
quarter century. It has also reduced the probability of interest
rate cuts by the central bank next year from the current 14.25
percent, economists say. 
    Yields on interest rate futures <0#2DIJ:> rose in early
Friday trading in Sao Paulo.
    Below is the result for each price category:     
                               October     September
 - Food and beverages          0.77        0.24
 - Housing                     0.75        1.30
 - Household articles          0.39        0.19
 - Apparel                     0.67        0.50
 - Transport                   1.72        0.71
 - Health and personal care    0.55        0.55
 - Personal expenses           0.57        0.33
 - Education                   0.10        0.25
 - Communication               0.39        0.01
 - IPCA                        0.82        0.54
 (Reporting by Silvio Cascione; editing by John Stonestreet and
W Simon)