UPDATE 1-Mexico inflation rises faster than expected from record low

martes 9 de febrero de 2016 10:37 GYT
 

(Recasts with rise off record low)
    MEXICO CITY, Feb 9 (Reuters) - Mexico's annual inflation
rose faster than expected in January from a record low, partly
reflecting a deep slump in the peso,  while a steeper pace of
price gains ahead is expected to spur more interest rate hikes. 
    Inflation in the 12 months through January rose
to 2.61 percent, above a 2.52 percent forecast in a Reuters poll
and up from a 2.13 percent rate in December. 
    Mexico posted record lows in its annual inflation rate every
month since last May, the longest period ever in which price
gains stayed below the central bank's 3 percent target, but  big
currency losses are seen pushing prices higher this year. 
    Policymakers in Latin America's No. 2 economy raised
interest rates in December following a move by the U.S. Federal
Reserve. Mexico is seen lifting borrowing costs further to help
support the peso as U.S. borrowing costs rise.
    Last week, the central bank held interest rates steady but
said it would monitor increasing risks to inflation from sharp
losses in the peso, which shed more than 5 percent in January
after a nearly 17 percent drop in 2015. 
    The central bank expects inflation to climb back to around 3
percent in 2016, under pressure from the weaker peso, but the
pace of gains is far lower than elsewhere in Latin America.  
    Consumer prices rose 0.38 percent in January
compared with the prior month, above a forecast 0.28 percent,
driven higher by jump in onion and cooking gas prices.
    The core index, which strips out some volatile food and
energy prices, rose 0.19 percent from December, just below an
estimated 0.21 percent. 
    The 12-month core inflation rate rose 2.64
percent compared to a forecast 2.65 percent and up from 2.41
percent in December, reflecting modest pressure from higher
import prices due to the weak peso.

 (Reporting by Michael O'Boyle; Editing by Nick Zieminski)