(Bloomberg) -- Brazil’s annual inflation surged past 10% in mid-September, as the central bank pledges another interest rate hike to rein in price increases.
Consumer prices jumped 10.05% from a year ago and 1.14% from the month prior, the national statistics institute reported on Friday. Economists expected 1.04% monthly increase, according to a Bloomberg survey.
The increase was driven by transportation costs that jumped 2.22% from the month prior, and food prices that climbed 1.27%. Brazil’s central bank targets inflation at 3.75% for this year, and 3.5% for 2022.
Policy makers have lifted borrowing costs by 425 basis points since March, and on Wednesday said another full percentage-point hike is needed to contain price shocks. Their efforts to curb inflation have been complicated by a major drought that has caused electricity bills to spike, and by more expensive services as Covid-19 restrictions are removed.
Read more: Brazil Sets Rate Hike’s Cruising Speed at 100 Basis Points
At the same time, the nation’s currency has weakened as investors fret over debt levels and the potential fallout from investigations into President Jair Bolsonaro.
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