(Recast, adds details and context)
BRASILIA, Oct 7 (Reuters) - Trailing 12-month inflation in Brazil slowed slightly in September in line with expectations, yet remained near 10 percent as a sharp slump in the currency offset declining personal expenses and education costs.
Consumer prices as measured by the benchmark IPCA index rose 9.49 percent in the 12 months through September, down from 9.53 percent in August, the government statistics agency IBGE said on Wednesday. The median forecast in a Reuters poll of analysts was 9.49 percent for September.
Inflation remained high and disseminated in September, with prices in six of the index’s nine categories rising above the ceiling of the central bank’s target range. Higher food, household expenses and apparel prices continue to be leading drivers of inflation, partly because Brazil’s currency recently weakened to a record low.
Housing and transport also gained sharply from August.
The IPCA index rose 0.54 percent on a monthly basis in September, up from an increase of 0.22 percent in August.
The inflation rate has remained around 12-year highs after President Dilma Rousseff’s government hiked taxes and government-controlled prices such as gasoline and electricity rates to help plug a growing budget deficit.
The country’s inflation rate is not expected to fall to the government’s 4.5 percent target before 2017, even if interest rates remain at the current 14.25 percent well into next year, according to a weekly central bank survey.
The central bank has pledged to lower inflation to the target by late 2016, but has signaled it prefers to keep rates on hold for some time as the economy sinks into its worst recession in nearly three decades.
Given the currency drop, many analysts have started to weigh the possibility of further interest rate increases to anchor expectations ahead. The central bank is scheduled to meet on Oct 21 to decide on its benchmark Selic rate. (Reporting by Alonso Soto; Editing by Guillermo Parra-Bernal and Nick Zieminski)