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By Alexandra Alper and Michael O'Boyle
MEXICO CITY, Nov 8 (Reuters) - Mexico's central bankers were unanimous in their decision to lower interest rates last month to counter an economic slowdown while all agreed that growth had picked up and that further cuts would not be needed.
Board members voted 5-0 to cut their benchmark rate by 25 basis points to a record low of 3.50 percent, the second cut in two months, after Latin America's no. 2 economy contracted in the second quarter for the first time in four years.
But central bankers also agreed in their decision to communicate that no further cuts were advisable, since the central bank expects growth to pick up next year.
"All members agreed that there are signs of a nascent recovery," the minutes said. A majority agreed that downside risks to the economy persisted, but said the threat had faded since early September.
Mexico's economy is seen growing just over 1.2 percent, according to the most recent poll from the central bank, down sharply from a 3.8 percent rate in 2012.
The majority of board members agreed the risks to inflation had improved. Inflation cooled in October to 3.36 percent, its lowest since January, as pressure on fresh food prices faded.
All members of the board agreed that Mexico's tax overhaul is likely to have only a transitory impact on inflation.
The central bank said in its quarterly inflation report this week that higher taxes will drive inflation about 40 basis points higher next year to around 3.5 percent next year.