Brazil inflation accelerates in October

In a result that may reinforce expectations of interest rate hikes, Brazil's benchmark IPCA inflation index rose 0.44 percent in October, more than 0.33 percent in September, the government said on Thursday.

The result was slightly higher than the 0.42 percent average forecast in a Reuters survey of 10 economists.Prices rose in the latest month primarily because of rising fuel prices, which have been pressured by surging global crude oil and domestic ethanol costs.

The IPCA index, calculated by the government's IBGE statistics institute, is used by the central bank as a guide when setting interest rates.

Brazil's central bank is widely expected to hike its key Selic interest rate, currently at 16.75 percent a year, by at least a quarter of a percentage point on Wednesday at the conclusion of its next monetary policy meeting.

The hike would aim to lower inflation to the central bank's 5.1 percent IPCA target for next year.The IPCA rose 5.95 percent in the first 10 months of the year. In the 12-month period ending in October, the index rose 6.86 percent.

(From Reuters, November 11, 2004)

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