UPDATE 1-Brazil's inflation rises more than expected in mid-April
(Adds table, details on 12-month rate, market reaction) By Silvio Cascione BRASILIA, April 17 (Reuters) - Consumer prices in Brazil rose more than expected in the month to mid-April, reinforcing expectations of further interest rate increases by the central bank in coming months. The IPCA-15 consumer price index rose 1.07 percent in the month to mid-April, government statistics agency IBGE said on Friday, topping market expectations for an increase of 1.00 percent in a Reuters poll. In the 12 months through mid-April, consumer prices rose 8.22 percent, up from a rise of 8.14 percent in the 12 months through mid-March and far above the goverment's target of 4.5 percent. Yields on interest rate futures <0#2DIJ:> rose after the numbers were released, signaling traders added bets on upcoming interest rate increases. The central bank has raised its benchmark Selic rate since October to a six-year high of 12.75 percent in an attempt to lower inflation. Higher electricity rates were again the main cause for the inflation surge, with an increase of 13 percent from mid-March. Energy rates and other government-regulated prices have been rising sharply since President Dilma Rousseff was re-elected in October. Policymakers have since stopped postponing price hikes to control inflation and are focusing instead on plugging Brazil's growing budget deficit. Food prices also gained sharply, rising 1.04 percent from mid-March, although the increase was smaller than the 1.22 percent rate seen in the previous month. Despite growing evidence that Brazil's economy is in recession, the central bank and market economists expect inflation to subside only next year, when it could drop to an annual rate of near 5 percent. Brazil's stagflation has dragged on consumer and business confidence and helped send the popularity of President Rousseff to near record lows. The central bank's next rate-setting meeting takes place on April 28-29. Below is the result for each price category: April March - Food and beverages 1.04 1.22 - Housing 3.66 2.78 - Household articles 0.68 0.44 - Apparel 0.94 -0.11 - Transport 0.33 1.91 - Health and personal care 0.44 0.96 - Personal expenses 0.57 0.41 - Education 0.14 0.74 - Communication -0.30 -0.78 - IPCA-15 1.07 1.24 (Reporting by Silvio Cascione Editing by W Simon)
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