Mexico Inflation Surges

Inflation in Mexico rose in June to its highest level in more than eight years, to an annual rate of 6.3%, the National Statistics Institute reported, AFP said. Consumer prices have risen sharply since the start of the year, a trend driven by higher energy prices and a weak peso against the dollar, which makes imports more expensive. The annual rate registered in June was the highest since December 2008 when it hit 6.53% in the midst of the international financial crisis. The annual inflation rate remained below the government target of 3% until September 2016 when it began spurting upwards. The Banco de Mexico has responded by raising its benchmark interest rate ten times since December 2015 to 7%, its highest level since February 2009. Last month analysts polled by the central bank forecast a 6% inflation rate by the end of the year, and then a decline to 3.8% by the end of 2018.