By Rogerio Jelmayer

SAO PAULO--Consumer inflation in Sao Paulo, Brazil's largest city, picked up in October, but less than expected, highlighting signs that inflationary pressures across Latin America's largest nation are moderating.

The consumer-price index in Sao Paulo increased 0.27% in October, compared with a drop of 0.14% in September, Fipe research foundation said Friday. Fipe is affiliated with the University of Sao Paulo.

The reading came below market average forecasts for a CPI increase of 0.30%.

Annual inflation cooled, with the 12-month index through October increasing 7.61% compared with the previous month's 8.26% rise.

Transportation costs, including fuel prices, rose 0.71% last month, versus a rise of 0.24% in September.

Food prices, which have the greatest weighting in the index, fell 0.27% in October, compared with a 1.09% drop in September.

Last month, the Brazilian central bank reduced its Selic base rate to 14% from 14.25%. The bank is expected by economists to continue its cycle of reduction in the next months, as inflation shows signs of a slowdown.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

(END) Dow Jones Newswires

November 04, 2016 06:12 ET (10:12 GMT)

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