We expect the rise in Mexican inflation in the first half of this month, to 2.7% y/y from 2.5% y/y over June as a whole, to be the start of an upward trend that will ultimately force the central bank to tighten monetary policy further. The MPC is unlikely to be in a rush to follow up last month’s 50bp rate hike with a further rise in August, but we continue to expect at least one more hike this year.
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