Brazil could see biggest rate hike since 2003 as economy reopens

President in Brazil, Jair Bolsonaro. Foto: AP/Lucio Tavora

A new front is opening up in Brazil's war against inflation amid surging costs for services from airline fares to appliance repairs, sparking speculation that one of the world's most aggressive central banks may this week deliver its biggest interest rate hike in almost two decades.

Food and energy have been leading price increases in Brazil, with imports and other tradable goods close behind amid global supply-chain issues and a weaker currency. But now, with the Covid-19 vaccination rate slowly creeping up in a population eager to get back to restaurants, nightclubs and beach trips, services inflation is quickly accelerating: The annual rate is now more than double what it was less than a year ago...

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