UPDATE 1-Mexican prices rise in October, but president expects inflation to cool

·1 min read

(Recasts with president's comments, consultancy note, details)

MEXICO CITY, Oct 22 (Reuters) - Mexican inflation rose slightly during the first two weeks of October, official data showed on Friday, an uptick the president attributed to a global fall in production as well as the U.S. economy "heating up," which has spurred demand.

President Andres Manuel Lopez Obrador told reporters he expected higher prices would abate "soon."

According to data from national statistics agency INEGI released earlier on Friday, consumer prices rose 0.54% during the first half of October.

That boosted the headline annual inflation rate to 6.1%, significantly higher than the 3% target set by the central bank.

Meanwhile, the closely watched core price index , which strips out some volatile food and energy prices, climbed 0.33% during the same two-week period.

Speaking at his regular morning news conference, Lopez Obrador expressed concern that rising prices were hitting family finances while also dismissing the possibility that creeping inflation would persist for an extended time.

"I think it's a transitory issue and fleeting, and that we'll have a reduction in inflation soon," Lopez Obrador said.

The annual core inflation rate of 5.1% marks its highest level in a dozen years and "will add to the growing hawkish sentiment at the central bank," according to a research note from Capital Economics.

Despite rising prices, the consultancy added that it expected only a 25 basis point interest rate hike from the Mexican monetary authority at its next meeting in November due to what it described as "weakness" in the economy. (Reporting by David Alire Garcia and Raul Cortes Fernandez Editing by Mark Potter)

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