MEXICO CITY (Reuters) - Mexico's inflation slowed to 8.41% in the 12 months through October, data from the national statistics agency showed on Wednesday, coming in slightly below forecasts on the eve of the central bank's next monetary policy meeting.
Despite decelerating from the 8.7% annual rate seen last month, Mexico's inflation remains well above target and markets forecast a fresh 75 basis-point interest rate hike to 10% this week.
Earlier this year, 12-month inflation in Latin America's second-largest economy had reached levels not seen since late 2000, blowing past the Bank of Mexico's target of 3% plus or minus 1 percentage point and leading to an aggressive monetary tightening.
On a monthly basis, consumer prices in Mexico rose 0.57% in October, according to non-seasonally adjusted figures from statistics agency INEGI.
"Headline inflation is probably peaking, and a gradual downtrend likely will soon emerge," said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.
"But core inflation remains stubbornly sticky. This, and still-rising inflation expectations, will push Banxico to hike this week the main rate by 75 basis points".
The core inflation index, which strips out some volatile food and energy prices, rose 0.63% during October, reaching an annual rate of 8.42%.
Economists polled by Reuters had expected headline inflation to come in at 8.46%, while the core index was seen hitting 8.44%.