UPDATE 1-Mexican central bank leaves door open to future rate cuts

(Adds central bank comments, details, background)

MEXICO CITY, Nov 28 (Reuters) - Mexico’s central bank said economic activity was weaker than anticipated and inflation may cool faster than previously thought, minutes of the bank’s last monetary policy meeting showed on Thursday, leaving the door open to future rate cuts.

At that Nov. 14 meeting, for the third time in a row, the Bank of Mexico cut borrowing costs, lowering its key interest rate by 25 basis points to 7.50% and flagging the growth outlook had likely worsened in recent months.

Board members Gerardo Esquivel and Jonathan Heath both voted for a 50 basis point rate reduction at the last meeting.

Heath said headline inflation had fallen to the bank’s 3.0% target, economic activity was stagnant, forecasts indicated the negative output gap would continue to widen, and that central banks around the globe were easing monetary policy.

“The aforementioned favors adopting a less restrictive policy stance,” Heath argued, according to the minutes.

The bank’s five-person board said it was concerned about soft economic activity, with one of the members forecasting no growth at all for the fourth quarter.

Most of the board expressed “concern” with the stagnation this year of tertiary activities, which capture services.

The Bank of Mexico on Wednesday cut its economic growth forecast, warning that Latin America’s second biggest economy could end 2019 with a slight contraction. However, it denied Mexico was currently in recession. (Reporting by Anthony Esposito and Frank Jack Daniel; Editing by Dave Graham and Daniel Wallis)