Brazil inflation tops 10 percent in November, a 12-year high

By Silvio Cascione

BRASILIA (Reuters) - Brazil's annual inflation rate climbed above 10 percent to a 12-year high in November, which was more than expected and may force tighter monetary policy despite a severe recession.

Consumer prices measured by the benchmark IPCA index rose 10.48 percent in the 12 months through November, up from an increase of 9.93 percent in October and above a Reuters poll forecast of 10.41 percent, government statistics agency IBGE said on Wednesday.

The government targets inflation of 4.5 percent, a goal analysts see as infeasible until at least 2017. To keep inflation under control, the central bank has signaled it could raise interest rates in January from a nine-year high of 14.25 percent .

Brazil's inflation has gained steam in recent months as a political crisis threatening to unseat President Dilma Rousseff fueled a sharp currency devaluation. Food prices also picked up as a strong El Niño weather pattern boosted rainfall in southern Brazil.

Food prices rose 1.8 percent in November, pushed up by fresh produce such as potatoes and onions that are more susceptible to weather conditions. Fuel prices jumped 4.6 percent as an exchange rate near record lows increased costs at state-run oil company Petroleo Brasileiro SA , which imports gasoline for domestic consumption.

On a monthly basis, the IPCA index rose 1.01 percent, compared with an increase of 0.82 percent in October.

The price spikes have fueled popular discontent against President Rousseff as Brazilians recall several bouts of hyperinflation in the past century.

Current inflation is much milder than in previous episodes, but it has been accompanied by the worst recession in decades. Analysts forecast an economic contraction of more than 3 percent this year and more than 1 million jobs lost.

Yields on interest rate futures were little changed <0#2DIJ:> as traders stuck to bets that the central bank would raise interest rates in its next meeting, in January.

Below is the result for each price category:

November October

- Food and beverages 1.83 0.77

- Housing 0.76 0.75

- Household articles 0.31 0.39

- Apparel 0.79 0.67

- Transport 1.08 1.72

- Health and personal care 0.64 0.55

- Personal expenses 0.52 0.57

- Education 0.22 0.10

- Communication 1.03 0.39

- IPCA 1.01 0.82

(Reporting by Silvio Cascione; Editing by Hugh Lawson and Lisa Von Ahn)

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