Brazil's economic activity starts Q4 on weaker footing

BRASILIA, Dec 15 (Reuters) - Brazil's economy started the fourth quarter on a weaker footing, central bank data showed on Monday, as analysts closely monitor activity indicators to calibrate their bets on when a monetary easing cycle might start.

The IBC-Br economic activity index, a proxy for gross domestic product (GDP), fell 0.2% in October from the previous month, undershooting the forecast of 0.1% growth from economists polled by Reuters.

Based on central bank estimates for agriculture, industry and services, along with production-related taxes, the index would have contracted 0.3% month on month without support from a 3.1% expansion in the farm sector, the only positive contribution in the period.

On a non-seasonally adjusted basis, the index rose 2.5% in the 12 months through October.

The central bank last week held its benchmark interest rate at 15% for a fourth consecutive meeting, maintaining a hawkish stance and reiterating the need to keep rates unchanged for a prolonged period to bring inflation back to its 3% target.

While policymakers offered no guidance on when rate cuts might begin, economists expect easing to start in the first quarter of next year, with most forecasting an initial move in March, though many see scope for a cut as early as January.