UPDATE 2-Chile inflation higher than forecast in June

(Adds analyst quotes, more figures, background)

By Antonio de la Jara

SANTIAGO, July 4 (Reuters) - Chilean inflation hit its highest monthly level in nearly two years in June, easily outstripping analysts' forecasts due to a sharp rise in the cost of food, housing and fuel.

The National Statistics Institute (INE) said its consumer price index rose 0.9 percent last month -- its biggest monthly increase since September 2005 when Hurricane Katrina ravaged the Gulf of Mexico and spurred a sharp rise in oil prices.

The June figure was much greater than the median forecast of a rise of 0.5 percent expected by 10 economists polled by Reuters. Forecasts had ranged from 0.3 to 0.6 percent.

It was also significantly higher than the 0.6 percent recorded in May this year and the rate in the corresponding month last year, which was also 0.6 percent.

Economists said the June figure made it more likely the central bank would hike its benchmark interest rate when it meets next Thursday for its monthly monetary policy meeting.

"Faced with this panorama, it makes sense to think the central bank will lift the interest rate at its next meeting," said Tomas Flores, economist at Santiago think-tank Libertad y Desarrollo.

"At their last meeting, they already said they were worried about the situation and left the door open for a hike," he said.

The bank's benchmark rate has stood at 5.0 percent since January this year.

The INE said inflation for the 12 months to the end of June was 3.2 percent compared with 2.9 percent in the year to the end of May.

Core inflation, which excludes the price of fresh fruit and vegetables and fuel, was 0.5 percent last month and 3.2 percent for the 12 months to the end of June.

The biggest sectoral increase was in food prices, which rose 2.2 percent from the previous month and 6.6 percent on an annual basis. The price of fresh fruit and vegetables jumped 9.9 percent from May while dairy products rose 8.7 percent.

Flores said the price of milk had been driven sharply higher by increased demand abroad.

The cost of housing rose 1.1 percent in June compared with May while transport costs rose 1.0 percent due to the higher price of fuel.

The INE said its producer price index rose 1.4 percent in June and 6.6 percent in the 12 months to the end of June.