MEXICO CITY (Reuters) -Mexico’s annual headline inflation likely slowed in the first half of July, though the core index remained under pressure, fueling expectations the central bank will moderate the pace of its interest rate cuts, a Reuters poll showed on Monday.
The median forecast from 11 analysts was for a 3.64% annual headline inflation rate, down from 4.13% in the second half of June. The rate would place it within the central bank’s target range of 3%, plus or minus one percentage point.
In contrast, forecasts for core inflation, considered a better measure of price trends because it strips out highly volatile items, indicated an acceleration to 4.30%, its highest level since the middle of last year.
Compared with the previous two-week period, consumer prices were seen rising 0.27%, while the core index is forecast to have increased 0.20%, according to the poll.
Official data is scheduled for release on Thursday.
Last month, Mexico’s central bank cut its key interest rate by 50 basis points to 8.0%, although the five-member board’s decision was not unanimous, as Deputy Governor Jonathan Heath voted to leave it unchanged.
According to the meeting minutes, the four officials who supported the cut, the fourth consecutive cut of that size, said the bank could adopt a more gradual approach in future decisions.
The central bank has lowered its benchmark rate by 325 basis points since the start of 2024 as part of an easing cycle after the rate reached a historic high of 11.25%. The next monetary policy decision is scheduled for August 7.
(Reporting by Gabriel Burin in Buenos Aires; Writing by Noe Torres;Editing by Marguerita Choy)
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