Chile inflation quickens in August, testing rate-cut hopes

By Aida Pelaez-Fernandez ‌and Natalia ​A. ​Ramos Miranda

SANTIAGO, Sept 8 (Reuters) - Chile's consumer prices rose 0.6% in August from July, above ‌market expectations and the fastest monthly increase since ⁠April, official data showed on Tuesday.

The monthly rate accelerated ‌from 0.1% in July and ‌exceeded the 0.3% median forecast in a Reuters poll of economists and the expectation of central ​bank traders.

Statistics agency INE said the biggest upward pressure came from food and non-alcoholic beverages ⁠and transport. Food and non-alcoholic beverages rose 1.4% from the previous ​month, while transport climbed 1.6%. Of the 13 categories in the consumer basket, nine posted ​monthly price increases.

Annual inflation accelerated ‌to 4.1% from 3.5% in July, moving outside the central bank's tolerance range ⁠of 3%, plus or minus one percentage point.

"Inflation expectations will rise," Scotiabank analysts said in a note, adding ⁠that the central bank could lift its year-end forecast of ​4.2% further, partially reflecting the effects of weather phenomenon El Niño.

Analysts at savings and credit cooperative Coopeuch said the inflation ‌report supported a cautious approach from policymakers.

Chile's central bank is expected to hold ‌its benchmark rate at 4.5% in a meeting ⁠later on Tuesday.

(Reporting by ‌Aida Pelaez-Fernandez and ​Natalia Ramos; Additional reporting by Fabian Cambero; Editing by Andrew Heavens, Kylie Madry, Rod ‌Nickel)

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