UPDATE 1-Mexico Jan inflation picks up as peso sinks despite rate hike
(Adds background, historical comparisons) MEXICO CITY, Jan 22 (Reuters) - Mexico's annual inflation picked up in early January off a record low, despite an interest rate hike last month aimed at protecting the tumbling peso. Inflation in the 12 months through mid-January rose to 2.48 percent, the national statistics institute said on Friday, above the 2.13 percent reached in the full month of December but below the 2.55 percent seen in a Reuters poll. Mexican full-month inflation hit eight record lows in a row last year despite a deep slump in the peso due to tumbling oil prices. Mexico's central bank hiked interest rates last month to safeguard the flagging currency and is expected to continue hiking in line with the U.S. Federal Reserve. But inflation is seen creeping up to Banco de Mexico's 3 percent target this year. The data showed that consumer prices rose by 0.03 percent in the first half of January. The analysts' poll had forecast a 0.10 percent increase. The core price index, which strips out some volatile food and energy prices rose by 0.08 percent, below expectations for a 0.17 percent increase. That took the 12-month core inflation rate to 2.61 percent, below expectations for a 2.70 percent rise. (Reporting by Alexandra Alper; Editing by Meredith Mazzilli)
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