Mexico’s inflation rises to 3.75% in October, above forecasts

Mexico’s annual inflation rate rose to 3.75% in October, up from 3.45% in September and higher than economists had expected.

The increase marked a third consecutive month of rising inflation, though the rate remained within the central bank’s 2% to 4% tolerance range around its 3% target.

Prices for electricity and air travel rose sharply during October, while the end of summer electricity subsidies in 18 cities contributed to higher power bills.

Underlying inflation, which excludes more volatile prices, also edged up, reaching 3.80% from 3.75% in September.

The figures come after Mexico’s central bank cut its key interest rate by a quarter point the previous week, in a divided decision that renewed debate about easing policy while inflation remains above target.

The bank said it expects to keep the new rate unchanged for an extended period, and its latest forecast points to inflation returning to 3% in the final quarter of 2027.

The data may increase scrutiny of the rate decision as policymakers weigh persistent price pressures against economic growth.