* November inflation 4.18 percent; poll 4.34 percent
* Backs forecast for no interest rate change
By Alexandra Alper and Krista Hughes
MEXICO CITY, Dec 7 Mexico's annual inflation
eased for the second month running in November, further
diminishing chances of the central bank raising interest rates
Mexican consumer prices rose 4.18 percent in the year
through November, down from 4.6 percent in October and below
expectations in a Reuters poll for 4.34 percent, the national
statistics agency said on Friday.
Consumer prices rose 0.68 percent last month,
above the 0.51 percent rate notched in October but below the
0.83 percent expected in a Reuters poll.
Although inflation has been above the central bank's 4
percent ceiling for six months, a welcome retreat from a 2-1/2
year peak in September has prompted the Banco de Mexico
(Banxico) to row back on threats to raise interest rates "soon."
November's inflation rate was the lowest since May.
"Clearly inflation reached a peak and is going down," said
Benito Berber, an economist at Nomura in New York. "There is
very little probability that Banxico regains its hawkish tone in
the near future."
Last week the Banco de Mexico said it expected inflation to
end the year below 4 percent, and investors and economists
believe interest rates will be held at 4.5 percent until
Inflation had been pushed upward by fresh food prices as the
cost of eggs and chicken rose following an outbreak of avian flu
in western Mexico and bad weather damaged crops.
But data showed a 2.04 percent drop in fruit and vegetable
prices in November, the second monthly fall in a row, which
helped ease the headline rate, although the removal of summer
electricity subsidies continued to weigh.
"The central bank is likely to draw comfort from the lack of
evidence of second-round effects from the recent large domestic
and external supply shocks to food prices," Goldman Sachs
economist Alberto Ramos said in a client note.
The core price index, which strips out some
volatile food and energy prices, rose 0.05 percent in November,
compared with an expected 0.26 percent and a 0.23 percent rise
Annual inflation in services, a key gauge of home-grown
price pressures, decelerated to 1.7 percent and non-food core
goods inflation, the most sensitive to currency fluctuations,
picked up to 4.1 percent.