Brazil Inflation Unlikely to Converge on Target

Brazil inflation is unlikely to converge on government's 4.5% target and will remain elevated in long term, says Espirito Santo Investment Bank. September data showed prices advancing 0.57%, accelerating from August. Inflation not just related to drought-related impact on food prices, bank says, noting higher prices for services. That makes it "nigh on impossible" to hit target, firm adds. Bank believes "inflation is likely to stay at the 5.5% level for a long time, driven by the recent monetary policy approach." Central bank unlikely to cut interest rates again next week, despite market pricing in quarter-point cut, bank says.