UPDATE 1-Mexico annual inflation rate picks up pace in November
MEXICO CITY Dec 9 (Reuters) - Mexican inflation picked up less than expected in November on a spike in fresh food and electricity costs and muted underlying price pressures boded for steady borrowing costs through next year.
Inflation in the 12 months through November rose to 3.62 percent, the national statistics agency said on Monday.
The pace of price gains was higher than October's 3.36 percent rate, the slowest since early this year, and just below the 3.64 percent expected in a Reuters poll.
Mexico's central bank on Friday held interest rates at a record low of 3.50 percent, citing tame inflation and a fragile economic recovery.
Monday's data showed policymakers have plenty of room to keep down borrowing costs as the economy recovers from a sharp slowdown in the first half of 2013.
Yields on Mexican interest rate swaps edged lower after the data, as investors cemented bets that project steady interest rates until an expected hike in December next year, while most analysts see steady borrowing costs until March 2015.
Consumer prices rose 0.93 percent in November due to higher tomato and onion prices and the end of summer electricity subsidies, up from October's 0.48 percent increase.
Core prices, which strip out volatile food and energy costs, rose 0.14 percent compared with an expected 0.18 percent increase and after rising 0.19 percent in the prior month. The annual core rate was at 2.56 percent, still near August's record low of 2.37 percent.
Mexico's central bank targets a 3 percent inflation rate, but is comfortable with a rate of up to 4 percent.
The economy's growth picked up in the third quarter after a sharp slowdown and policymakers said Friday that inflation will hover around 3.5 percent through next year.
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