October 24, 2016 / 1:37 PM / 2 years ago

UPDATE 1-Mexico inflation rises in early Oct to 1-1/2 year high

(Recasts with annual rate, adds details on consumer prices)
    MEXICO CITY, Oct 24 (Reuters) - Mexico's annual inflation
rate rose in early October to its highest in 1 1/2 years,
breaking past the central bank's target and supporting bets that
policymakers could raise interest rates again after a deep slump
in the peso.
    Inflation in the 12 months through mid-October rose to 3.09
percent, the national statistics institute said on
Monday, its highest half-month reading since the second half of
April 2015.
    A Reuters poll projected the rate would rise to 3.08 percent
from 2.88 percent in early September. Mexico's central bank
targets inflation of 3 percent.
    Despite relatively tame inflation and weak growth, steep 
peso losses pushed policymakers hike interest rates three
times this year, most recently in late September, in a bid to
keep currency weakness from hitting inflation expectations.
    A Reuters poll last week showed Mexico's central bank is
expected to increase its benchmark interest rate by another 25
basis points before the end of the year to 5 percent, tracking
an anticipated hike by the U.S. Federal Reserve. 
    The annual reading of the core price index,
which strips out some volatile food and energy prices, rose to
3.10 percent in early October, its highest since December 2014.
    The core index reflects higher goods costs as the weak peso
drives up import prices.
    On a monthly basis, Mexican consumer prices 
rose 0.49 percent during the first half of October on higher
electricity costs as summer subsidies were cut. The core price
index climbed 0.17 percent.

 (Reporting by Michael O'Boyle; Editing by Bernadette Baum)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below