Chile’s inflation rises less than expected ahead of central bank rate meeting

Chile’s consumer prices rose less than expected last month, giving the central bank some relief ahead of its rate-setting meeting next week as policymakers weigh the inflationary impact of a recent fuel cost increase. The softer reading strengthens the case for a more cautious approach to interest rates, even as officials continue to watch for signs that price pressures could reaccelerate.

According to Bloomberg Economics, the latest inflation data undershot forecasts by a wide margin, which was welcome news for Chile’s monetary authorities. The central bank has been monitoring how higher fuel costs might spill over into broader prices, and the weaker-than-anticipated reading suggests those effects have not yet shown up strongly in consumer inflation.