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Brazil battles the rising tide

Brazil has been forced to raise its interest rates in an attempt to stem rising inflation.   

The rise - an increase in its benchmark interest rate to 13% from 12.25% - was larger than expected and it follows increases of half a percentage point by the central bank at its last two meetings.

Following the latest rate rise, Cristiano Souza, an economist at ABN Amro, said: "A 75-basis-point hike is better to bring inflation expectations down, which is a big problem.

"The government will probably increase rates by the same amount again at its next meeting in September and it is now possible that it will miss its year-end inflation target of 4.5%".

While inflation has been rising, Brazil has also seen robust economic growth, prompted in part by consumer spending as Brazilians enjoy rising incomes and cheaper credit.