Key facts
- Annual headline inflation reached 3.75% in October, above the 3.65% forecast in a Reuters poll of economists.
- Annual core inflation rose to 3.8% in October from 3.75% in September, slightly above the 3.78% expected.
- Consumer prices rose 0.65% in October from the prior month, non-seasonally adjusted, versus a 0.55% forecast.
- Banxico cut its benchmark rate by 25 basis points to 6.25% the previous week, calling it a "one-time adjustment".
- Capital Economics' William Jackson said the central bank is unlikely to change guidance toward further rate cuts.
Mexico's annual headline inflation rate rose to 3.75% in the year through October, up from 3.45% in September and above the 3.65% economists polled by Reuters had forecast, official data published on November 9 showed. It was the third consecutive month of acceleration.
The core index, which strips out some volatile food and energy prices, rose 3.8% annually, up from 3.75% in September and slightly above the 3.78% expected in the Reuters poll. Both headline and core rates remained inside the central bank's target range of 3%, plus or minus one percentage point.
On a monthly basis, consumer prices rose 0.65% in October, non-seasonally adjusted, after a 0.42% increase the prior month and against expectations of 0.55%. The core rate rose 0.34% on the month, above a 0.31% forecast.
The figures follow a surprise 25 basis point cut to Mexico's benchmark interest rate to 6.25% the previous week by the central bank, also known as Banxico, which called the move a "one-time adjustment" and said it would help bring inflation toward its target and address external macroeconomic risks.
"It seems highly unlikely that the central bank will alter its forward guidance to opt for further interest rate cuts," said William Jackson, chief emerging markets economist at Capital Economics, adding that the firm expects rates to remain at their current levels for an extended period.
Gabriella Siller, Banco Base's economic analysis director, said on X: "The likelihood of inflation returning to the 3.0% target in 2027 is virtually nil."