Mexico’s inflation rises in line with forecasts in early June

Mexico’s headline inflation rose in line with expectations in the first half of June, reinforcing expectations that the central bank should continue to steadily bring down interest rates in Latin America’s second-largest economy.

Mexican consumer prices rose 0.10% during the first half of June, data from the national statistics agency showed on Tuesday, in line with the 0.11% increase projected by economists in a Reuters poll.

The closely watched core price index, which strips out some volatile food and energy prices, climbed 0.22% in early June compared to the prior month.

Consumer prices in the 12 months through mid-June meanwhile increased 4.51%, up from 4.22% a month earlier and also in line with expectations.

The increase moves the inflation figure further from the Bank of Mexico’s target range of 3%, plus or minus one percentage point.

The central bank cut its benchmark interest rate by 50 basis points in May – its third consecutive cut of that size – bringing it down to its lowest point since August 2022, at 8.5%.

Analysts polled by Reuters expect the bank to announce another 50 basis point cut later this week.