RPT-POLL-Hong Kong Oct inflation seen slowing on food, energy

* What: Hong Kong October inflation

* When: Thursday, Nov. 20, at 4.30 p.m. (0830 GMT)

* October headline inflation easing to 1.9 percent

HONG KONG (Reuters) - Hong Kong's October headline inflation rate probably fell to 1.9 percent, helped by slowing food and energy prices and waivers on charges for public services, a Reuters survey shows.

As some of those waivers were not in place a year ago, the inflation rate will drop sharply from 3 percent in September, according to the survey.

Now that the economy is in recession, inflation is set to ease further as retailers will have very little room to raise prices while consumers cut back on spending, economists say.

Hong Kong's September headline inflation rate fell to 3 percent from 4.6 percent in August. Excluding temporary waivers introduced by the government on public housing rents and utility bills, underlying inflation in September eased to 6.1 percent after peaking at 6.3 percent in August.

Economists did not forecast underlying inflation for October but said it would be between 5 and 6 percent.

The government introduced waivers on public rents and services in February. At that time, it was awash with cash and wanted to give some back to the public. By July, the economy was slowing and the government stepped up waivers to help people cope with rising prices.

Inflation, which curbed consumer spending when it was running above 6 percent in the summer, is much less of a risk to consumers now that it is easing.

The government last week forecast headline inflation would average 4.2 percent in 2008. Netting out government waivers, inflation would average 5.5 percent, it said.

Consumers will still be reining in spending, though, amid fears about job security and wage growth, economists say.

Hong Kong tipped into its first recession in five years in the third quarter. Economists expect the economy to remain weak until the middle of next year at least as the territory, an international trade and finance hub, is being hit by a global economic downturn, aggravated by the global financial crisis.

The weak economy has begun to push down property prices, and that will exert downward pressure on private housing rents, economists say. Private rents account for more than 20 percent of the composite consumer price index, the main gauge of inflation.

Forecasts for the October consumer price index (percentage change from a year earlier):

Bank of East Asia 1.2  Continued...