UPDATE 1-Brazil inflation rises above market expectations in July
(Adds forecasts and context) BRASILIA, Aug 10 (Reuters) - Inflation in Brazil rose more sharply in July than economists expected, official data showed on Wednesday, raising pressure on the central bank to keep interest rates on hold for some time. Consumer prices as measured by the benchmark IPCA index , rose 0.52 percent last month, above the 0.45 percent median forecast in a Reuters poll of economists. Prices rose 8.74 percent in the 12 months through July, slowing from a one-year increase of 8.84 percent in June but above market expectations of 8.66 percent. Higher-than-expected inflation this year has forced the central bank to keep its benchmark Selic rate near 10-year highs even as the country struggles with a crippling recession that is now in its second year. High interest rates and growing expectations that austerity measures under interim President Michel Temer will be approved have recently curbed inflation expectations for this year and next. Less government spending and more-expensive credit lead to lower consumption, which reduces inflationary pressures. Below are the inflation rates for each price category: July June - Food and beverages 1.32 0.71 - Housing -0.29 0.63 - Household articles 0.53 0.26 - Apparel -0.38 0.32 - Transport 0.40 -0.53 - Health and personal care 0.61 0.83 - Personal expenses 0.70 0.35 - Education 0.04 0.11 - Communication 0.02 0.04 - IPCA 0.52 0.35 (Reporting by Alonso Soto; Editing by Lisa Von Ahn)
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