Brazil's inflation set to drop below 8 percent in October

A customer looks at the prices at a supermarket in Rio de Janeiro, Brazil, May 6, 2016. REUTERS/Nacho Doce

BRASILIA (Reuters) - Brazil’s annual inflation rate probably fell below 8 percent in October for the first time since February 2015, staying on course toward the central bank’s target and making room for interest rate cuts, a Reuters poll showed on Tuesday.

Consumer prices as measured by the benchmark IPCA index likely rose 7.9 percent in the 12 months through October, slowing from an advance of 8.48 percent in September, according to the median of 24 forecasts. BRCPIY=ECI

The central bank expects inflation to fall next year to around its 4.5 percent goal.

In the month of October, prices probably rose 0.28 percent, up from 0.08 percent in September, according to the median of 27 estimates.

The national statistics bureau IBGE publishes the October inflation data on Wednesday at 9 a.m. (1100 GMT). Monthly estimates ranged from 0.15 to 0.32 percent, while forecasts for the annual rate were between 7.76 and 7.94 percent.

Annual inflation has gradually slowed this year from a 12-year high of 10.7 percent in January.

With inflation on a downward path, the central bank last month cut interest rates from a decade high to help lift the economy out of a two-year-long recession.

Economists expect the bank to cut its benchmark interest rate by at least 25 basis points later this month, but the reduction could be even steeper if October inflation data is tamer than expected.

Reporting by Silvio Cascione Editing by W Simon