UPDATE 1-Mexico annual inflation unexpectedly eases to record low in June

jueves 9 de julio de 2015 09:27 GYT
 

(Recasts with record low, adds annual core rate, background)

MEXICO CITY, July 9 (Reuters) - Mexican annual inflation unexpectedly ticked down to a record low as sluggish economic growth helped contain price pressures, giving policymakers room to hold interest rates steady.

Inflation in the 12 months through June inched down to 2.87 percent from a previous record low of 2.88 percent in May, data from the national statistics agency showed on Thursday. A Reuters poll forecast a rate of 2.90 percent.

Last month, Mexico's central bank said it expected inflation to stay below its 3 percent target for the rest of the year after growth early this year was weaker than expected.

Mexican policymakers are facing a dilemma. While tame inflation and a slack economy give them room to leave interest rates low, they are expected to lift rates with the United States in a bid to avoid a stampede out of the peso bond market.

A poll this week from Banamex showed analysts have dialed back expectations from a 50 basis point hike this year to a 25 basis point increase.

Data showed consumer prices rose 0.17 percent in June, just below estimates, while the core index, which strips out some volatile food and energy prices, rose 0.21 percent during the month, in line with the poll.

Mexico's peso has slumped since late last year, hitting a record low this week, but so far there has been little sign that higher import costs are spurring widespread price gains.

Annual core inflation in June held at the same 2.33 percent rate seen in May, as expected in the poll. (Reporting by Michael O'Boyle Editing by W Simon)