Paris, France (AHN) – France registered an inflation rate of 2.4 percent in August, up from 2.1 percent in July.

It is the fastest rate of increase in almost three years following the jump in prices of manufactured goods and cost of energy. The 2.4 percent consumer price index rate was higher than economists’ expectation of 2.2 percent.

The rate was calculated on a harmonized European Union method.

Manufacturing goods prices rose 1.6 percent and energy prices went up 0.4 percent. However, food prices went down 0.2 percent due to a seasonal drop in fresh produce prices.

The European Central Bank raised key lending rates two times in 2011, but last week said the risk of recession is greater than the threat from inflation.

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Sao Palo, Brazil (AHN) – Brazil’s central bank cited a “substantial deterioration” in its outlook for the economy and unexpectedly announced a cut in its key interest to 12 percent from 12.5 percent.

Rising prices have been a problem in Brazil, and the central bank had raised its key interest rate five times this year in an effort to contain inflation.

However, inflation is still running at a six-year high of 7.1 percent.

The continued high inflation rate couple with the unexpected cut coming a few days after several politicians had called for a rate cut. Observers say it calls into question the central bank’s independence.

Brazil, which is the biggest economy in South America, grew at the rate of 7 percent last year. This year Brazil’s economy is expected to grow at the rate of 5 percent.

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