UPDATE 2-Mexican inflation beats target for first time in three years

(Adds details from statistics agency)

MEXICO CITY, Sept 24 (Reuters) - Mexican consumer price inflation eased more than expected in the first half of September, data from the national statistics agency showed on Tuesday, dipping below the central bank’s target and strengthening expectations for an interest rate cut.

Inflation cooled to 2.99% during the period, undershooting the 3.03% consensus forecast of economists polled by Reuters. The level was the lowest since September 2016, the data showed.

With this reduction, inflation has dipped slightly below the Bank of Mexico’s target of 3%.

Mexico’s central bank cut rates for the first time in five years in August. The trend of declining inflation increases the likelihood of another rate cut when the bank, known as Banxico, meets on Thursday, analysts said.

“Today’s inflation figures reinforce the strong bet by investors on a dovish cut by Banxico on Thursday,” analysts with Mexican financial group Banorte wrote in a note to investors. They predicted the bank will cut its benchmark rate by 25 basis points, in line with other estimates.

Compared with the previous two-week period, consumer prices rose 0.17% in the first half of September.

The closely watched core price index, which strips out some volatile food and energy prices, climbed 0.19% in early September.

Compared with the same period last year, prices for goods and services rose most, while energy prices fell, the statistics agency said. (Reporting by Abraham Gonzalez; writing by Julia Love, Editing by William Maclean and Dan Grebler)