Brazil Sao Paulo inflation unexpectedly cools in July

* Brazil's FIPE index at 0.13 pct in July, 0.23 pct in June

* Index lower than 0.22 pct analysts expected

SAO PAULO Aug 2 (Reuters) - Inflation in Sao Paulo, Brazil's largest city, posted an unexpected slowdown in July as a spike in food prices lost momentum and apparel costs declined from the prior month.

The IPC-FIPE index rose 0.13 percent last month, compared with an increase of 0.23 percent in June, the University of Sao Paulo's FIPE economic research institute said on Thursday.

The index was expected to climb 0.22 percent, according to the median forecast of 13 analysts surveyed by Reuters.

Estimates ranged from 0.18 percent to 0.30 percent.

The FIPE index is closely watched by economists as a pointer to trends in Brazil's benchmark IPCA inflation index, which is used by the central bank as a guide when setting interest rates.

The central bank has slashed its benchmark lending rate by 4.5 percentage points in the past twelve months to an all-time low of 8 percent, as policymakers try to stimulate an economy that has been flirting with recession.

Below is the result for the FIPE index price categories: Item June July ====================================================== - Housing 0.03 pct 0.09 pct - Food 1.03 pct 0.53 pct - Transportation -0.73 pct -0.36 pct - Personal care 0.48 pct 0.33 pct - Health 0.57 pct 0.39 pct - Clothing 0.17 pct -0.63 pct - Education 0.11 pct 0.31 pct ====================================================== - INDEX 0.23 pct 0.13 pct