(Adds core inflation, analyst comment) CAIRO, July 8 (Reuters) - Egypt’s annual urban consumer inflation accelerated to 4.9% in June from 4.8% in May, official statistics agency CAPMAS said on Thursday, a slower pace of increase than expected. Month-on-month inflation slowed to 0.2% from 0.7% in May, the agency said. Core inflation, which strips out volatile items such as food, quickened to 3.8% year-on-year in June from 3.4% in May, according to the central bank. A slowdown in monthly inflation of food items was behind the latest figures, Allen Sandeep of Naeem Brokerage said. However, inflation could pick up in July and August after an average 15% increase in power prices from this month and the likelihood of a fuel price hike, he added. The Central Bank of Egypt (CBE) has set an inflation rate target of 7%, plus or minus 2 percentage points. “The numbers are lower than expected and also lower than the central bank’s target, especially in light of the rise in global commodity prices,” Radwa El-Swaify of Pharos Securities Brokerage said. Food and energy inflation as well as global commodity prices, supply shortages and higher freight costs are likely to push the headline inflation rate higher in the coming months, said James Swanston of Capital Economics. “Against this backdrop, policymakers at the CBE will probably opt to keep interest rates on hold until Q4,” he said in a note, adding that he forecast inflation to fall back in the final months of the year, allowing for rate cuts in 2022. Egypt has some of the highest real interest rates in the world, which has helped attract investment in treasuries but discouraged corporate borrowing. The central bank last cut interest rates in November, and holds its next interest rate meeting on Aug. 5. (Reporting by Ehab Farouk and Aidan Lewis Editing by Mark Potter, Barbara lewis and David Gregorio) Our Standards: The Thomson Reuters Trust Principles.