Brazil’s broadest measure of inflation quickened to the fastest pace in 28 months on a surge in raw materials and agricultural goods.

Consumer, construction and wholesale prices, as measured by the IGP-M price index, jumped 1.45 percent in November, the Rio de Janeiro-based Getulio Vargas foundation said on its website today. The gain was the most since July 2008 and higher than the 1.37 percent median forecast in a Bloomberg survey of 25 analysts. Prices rose 10.27 percent from a year ago.

Traders are wagering the central bank may resume interest rate increases as early as next week to rein in consumer prices, according to Bloomberg estimates based on interest rate futures contracts. Analysts raised both their inflation and interest rate forecast for next year, a central bank survey published today shows.

“Inflation expectations are worsening and the central bank will need to react to keep its credibility,” Zeina Latif, a senior economist at RBS Securities Inc., said in Sao Paulo. “Food inflation is persisting more than expected and already contaminating other prices and expectations.”

The real fell 0.1 percent to 1.7293 at 8:42 a.m. New York time. The yield on interest rate futures contracts due in January 2011, the most traded in Sao Paulo, fell 4 basis points, or 0.04 percentage point, to 10.72 percent. The yield on inflation-linked bonds due in 2012 fell 3 basis points to 6.04 percent.

Gradual Investimentos now expects policy makers will raise the overnight rate to 11 percent from 10.75 percent during their Dec. 7-8 meeting, according to an e-mailed report today. The Sao Paulo-based brokerage previously expected policy makers to increase rates in January.

Higher Selic

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