November 7, 2018 / 11:51 AM / 11 days ago

UPDATE 1-Brazil Oct inflation accelerates less than expected

 (Recasts throughout with details, context)
    By Bruno Federowski
    BRASILIA, Nov 7 (Reuters) - Brazil's inflation rate
accelerated less than expected in October, bolstering the case
for the central bank to wait longer before hiking interest
rates.
    Consumer prices tracked by the benchmark IPCA index rose
4.56 percent in the 12 months through October, government
statistics agency IBGE said on Wednesday, barely above the 4.53
percent mid-October rate.             
    Economists polled by Reuters had expected a 4.66 percent
increase.
    Even that smaller-than-expected headline number likely
overstates inflationary pressures. Much of the increase stemmed
from higher food and energy prices, notoriously volatile
categories which are not very sensitive to monetary policy.
    So-called core inflation, which strips the index of volatile
components, is hovering around 3.5 percent, far below the
central bank's 4.5 percent target for 2018 and 4.25 percent for
2019.
    That is likely to allow the bank to keep rates at an
all-time low in the short term, adding support to an
underwhelming economic recovery.
    The IPCA index rose 0.45 percent from September, IBGE said,
compared to a median 0.55 percent estimate.            
        
Below is the result for each price category: 
    
                              October      September 
- Food and beverages          0.59         0.10     
- Housing                     0.14         0.37      
- Household articles          0.76         0.11     
- Apparel                     0.33        -0.02     
- Transport                   0.92         1.69     
- Health and personal care    0.27         0.28     
- Personal expenses           0.25         0.38     
- Education                   0.04         0.24     
- Communication               0.02        -0.07     

- IPCA                        0.45         0.48     

 (Reporting by Bruno Federowski
Editing by Chizu Nomiyama)
  
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