(Adds annual rate, details on consumer prices, background)
MEXICO CITY, Oct 23 (Reuters) - Mexican annual inflation surged early in October to a nine-month high, further above the central bank’s tolerance ceiling, though the spike was expected to be temporary and wasn’t expected to boost borrowing costs.
Mexican inflation for the 12 months through the first half of October was 4.32 percent, data from the national statistics institute showed Thursday, above the 4.28 percent expected in a Reuters poll and 4.22 percent rate in all of September.
The figure marked its fastest pace since January.
Central Bank Governor Agustin Carstens said earlier this month he expected Mexican inflation to converge toward the bank’s target of 3 percent by the middle of next year despite food price shocks that have pushed up the annual rate.
The bank cut interest rates to a record low of 3 percent in June to spur sluggish growth in Latin America’s No. 2 economy. Mexico is expected to wait until the United States lifts borrowing costs before it raises its own interest rates.
Consumer prices rose 0.50 percent in the first half of October, compared to an expected 0.45 percent. The increase was driven by higher electricity costs as the government cut summer subsidies and a jump in onion prices.
Core consumer prices, which exclude some volatile food and energy prices, reached 0.12 percent, below the 0.14 percent rise seen by analysts and pointing to little pressure on prices from domestic demand amid slow growth. (Reporting by Michael O‘Boyle; Editing by Bernadette Baum)