(Adds detail on services prices, comment in paragraphs 6 and 7) By Silvio Cascione SAO PAULO, Dec 21 (Reuters) - Brazil's annual inflation rate slowed more than expected in mid-December, approaching the top end of the government's target and paving the way for more interest rate cuts. Brazil's IPCA-15 consumer price index rose 6.58 percent in the 12 months through mid-December, down from an increase of 7.64 percent in mid-November and close to the 6.5 percent ceiling of the government's target, statistics agency IBGE said on Wednesday. The index had been expected to rise 6.71 percent, according to the median forecast of 22 economists in a Reuters poll. Consumer prices rose 0.19 percent in the month to mid-December, the lowest reading for the period since 1998. Prices had risen 0.26 in mid-November. Yields on interest rate futures fell after the IPCA-15 release as traders added bets on a long cycle of monetary easing. Economists have expected the central bank to accelerate rate-cutting at its next meeting in January, which could help lift the economy out of a deep recession. Core services inflation, which the central bank tracks closely because of its sensitiveness to interest rates, eased to 6.47 percent from 6.87 percent in mid-November, according to calculations by Alberto Ramos, Goldman Sachs' head of Latin America research. Economist Alessandra Ribeiro of Tendências Consultoria in São Paulo said: "This was a favorable result for the central bank to step up the pace of interest rate cuts to 50 basis points in January." Below is the result for each price category: Mid-Dec mid-Nov - Food and beverages -0.18 -0.06 - Housing -0.28 0.36 - Household articles -0.52 0.09 - Apparel 0.57 -0.03 - Transport 0.79 0.46 - Health and personal care 0.43 0.68 - Personal expenses 0.63 0.47 - Education 0.07 0.02 - Communication 0.08 0.16 - IPCA-15 0.19 0.26 (Additional reporting by Camila Moreira; Editing by Lisa Von Ahn)
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