Mexico's Annual Inflation Hits 21-Yr High In June, More Rate Hikes Seen

• Mexico's annual inflation accelerated in June to a level not seen since early 2001, suggesting the central bank will have little choice but continue its monetary tightening to tame spiraling consumer prices. Mexican consumer prices rose 7.99% in the year through June, this is slightly above the 7.95% consensus forecast of economists polled by Reuters. 
• This was also far above the central bank's target of 3%, plus or minus a percentage point, and marked the highest level since January 2001, when Mexico's 12-month inflation stood at 8.11%. The latest inflation figures are expected to lead Banxico, as the central bank is known, to keep raising rates after a record 75-basis points hike last month, when it warned it would hike rates again and by as much to curb inflation.  
• Chief emerging markets economist at Capital Economics is projecting a 75bps hike in the policy rate in August to 8.5%, which places his policy rate forecast for 2022 at 9.5%.

(Source: Reuters)