Mexico June inflation up more than expected before policy meeting

Inflation in the year through mid-June hit 7.88%, against an expected 7.7% rise, accelerating from the 7.58% seen in the previous month and still well above the central bank's target of 3%, plus or minus one percentage point. The Bank of Mexico is scheduled to hold a monetary policy meeting later on Thursday, with analysts polled by Reuters expecting it to raise interest rates by a record 75 basis points to 7.75%.

Mexico's inflation rose by more than expected in early June, official national statistics agency figures showed on Thursday, ahead of a meeting at which the central bank is expected to raise interest rates again.

Consumer prices rose 0.49% during the first half of June, statistics agency INEGI said, against a forecast of 0.31% in a Reuters poll of economists. Inflation in the year through mid-June hit 7.88%, against an expected 7.7% rise, accelerating from the 7.58% seen in the previous month and still well above the central bank's target of 3%, plus or minus one percentage point.

The Bank of Mexico is scheduled to hold a monetary policy meeting later on Thursday, with analysts polled by Reuters expecting it to raise interest rates by a record 75 basis points to 7.75%. Banxico, as the central bank is known, has been raising rates as it struggles to rein in high consumer prices, has increased the benchmark rate by 300 basis points over its last eight policy meetings.

Mexico's closely watched core inflation index, which strips out some volatile food and energy prices, rose 0.5% in early June, while annual core inflation reached 7.47%, both above expectations for 0.34% and 7.3% respectively. Considering the core index, INEGI said in a report, prices of goods rose 0.64% and services prices were up 0.33% in the period.

Within the non-core index, it added, prices of agricultural products increased 0.85% while those of energy and government-authorized tariffs rose 0.19%.