MEXICO CITY: Mexico’s core annual inflation rate in early February rose faster than expected to a nearly seven-year high, the national statistics institute said on Thursday, supporting expectations for further interest rate hikes this year. The core price index, which strips out some volatile food and energy prices, rose 4.20 percent in the 12-month period to mid-February in a sign that the weaker peso is driving up consumer prices. It was the highest annual core mid-month inflation reading since March 2010. It also came in above the 4.02 percent forecast in a Reuters poll.
Mexico’s central bank raised its benchmark interest rate earlier this month to a nearly eight-year high after a steep hike in gasoline prices and weakness in the peso sparked by Donald Trump’s election as U.S. president. The headline inflation rate for the year through mid-February was 4.71 percent, easing slightly from a more than four-year high in January.
