Brazil inflation running at highest level in 6 years

BRASILIA: Brazil's inflation jumped to 5.9 percent in 2010, its highest rate in six years, according to the state statistics agency.

The increase in consumer prices, from 4.3 percent in 2009, was far higher than the 4.5 percent target eyed by the government and suggested Brazil's central bank would soon be forced to again raise its key interest rate.

At 10.75 percent, that interest rate is already among the highest of any of the big economies, making Brazil an attractive place to park money for investors faced with near-zero returns in the United States and Europe.

"The 2010 result shows that consumer prices have started to climb and have reached the level of 2008, when it was already at 5.9 percent," the Brazilian Geography and Statistics Institute said.

An average 10.3 percent hike in food prices was the main driver of the inflation index.