Brazil's São Paulo inflation slows down in June

* IPC-FIPE index rises 0.23 pct in June, 0.35 pct in May
* Transportation costs fall, helping offset food price spike

SAO PAULO, July 3 (Reuters) - Inflation in Sao Paulo,
Brazil's most populous city, slowed down in June as a decline in
transportation costs helped offset a jump in food prices, an
economic research institute said on Tuesday.
The IPC-FIPE index rose 0.23 percent last
month, compared with a gain of 0.35 percent in May, according to
the University of São Paulo's FIPE research institute.
The FIPE index is closely watched by economists as an early
gauge of Brazil's benchmark IPCA inflation index,
which is targeted by the central bank when setting interest
rates.
The central bank has slashed the benchmark overnight lending
rate by 4 percentage points since August to an all-time low of
8.5 percent, as policymakers try to stimulate an economy that
has been flirting with recession since the third quarter of
2011.
Below is the result for the FIPE index price categories:
===============================================================
Item June May
===============================================================
- Housing 0.03 pct 0.09 pct
- Food 1.03 pct 0.74 pct
- Transportation -0.73 pct -0.01 pct
- Personal care 0.48 pct 0.81 pct
- Health 0.57 pct 0.76 pct
- Clothing 0.17 pct -0.12 pct
- Education 0.11 pct 0.05 pct
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- INDEX 0.23 pct 0.35 pct