Mexico inflation up more than expected, new rate hikes possible
(Recasts, adds interest rate expectations, quote)
MEXICO CITY, July 22 (Reuters) - Mexican annual inflation rose higher than market expectations during the first half of July, according to official data released on Thursday, which may trigger additional interest rate hikes as the central bank seeks to tame higher consumer prices.
National statistics agency INEGI reported annual inflation up to 5.75% during the first two weeks of this month, accelerating slightly from the previous two-week period.
Central bank board member Jonathan Heath described the latest inflation data as "definitely bad" in a post on Twitter shortly after it was released.
A median forecast of 19 analysts had forecast inflation ticking down to 5.65% for the first two weeks of July, compared with 5.74% in the second half of June.
"There is a high possibility that the central bank will again raise its benchmark rate by 25 basis points at its August meeting," CI Banco analysts said in a research note later on Thursday.
A Banorte forecast sees the bank's key interest rate rising to 5.25% by the end of the year, up from 4.25% currently.
Consumer prices were up by 0.37% in first two weeks of the month versus the last two weeks of June, the data showed.
The Bank of Mexico, or Banxico, targets an inflation rate of 3% with a tolerance threshold of one percentage point above and below that level.
It raised the benchmark interest rate by 25 basis points last month, saying the move was necessary to avoid adverse effects on inflation expectations. (Reporting by Frank Jack Daniel; Editing by Noe Torres; Editing by Angus MacSwan)