Mexican inflation up more than expected ahead of key rate decision

MEXICO CITY, June 23 (Reuters) - Mexico's inflation rose by more than expected in early June, official data showed on Thursday, ahead of a meeting at which the central bank is widely expected to hike its key interest rate sharply in a bid to tame surging consumer prices.

Inflation rose 0.49% during the first half of June, statistics agency INEGI said, against a forecast of 0.31% in a Reuters poll of economists.

Inflation in the year through mid-June hit 7.88%, against an expected 7.7% rise, accelerating from the 7.58% seen in the previous month and still well above the central bank's target of 3%, plus or minus one percentage point.

The Bank of Mexico is scheduled to hold a monetary policy meeting later on Thursday, with analysts expecting it to raise interest rates by a record 75 basis points to 7.75%.

Banxico, as the central bank is known, has been raising rates as it struggles to moderate consumer price spikes, having increased the benchmark rate by 300 basis points over its last eight sessions.

Banco Base economist Gabriela Siller stressed that the inflation figures showed the government's package to fight shortages and inflation, including soaring fuel prices, has not helped.

"The gasoline stimulus has slowed down the rise in energy prices a bit, but that's artificial... There is no way to deny inflationary pressures, and there is a good chance that inflation in Mexico will reach 8% this year," she tweeted.

Mexico's closely watched core inflation index, which strips out some volatile food and energy prices, rose 0.5% in early June, while annual core inflation reached 7.47%.

Considering the core index, INEGI said, prices of goods rose 0.64% and services were up 0.33% in the period.

Within the non-core index, it added, prices of agricultural products increased 0.85% while those of energy and government-authorized tariffs rose 0.19%. (Reporting by Gabriel Araujo and Valentine Hilaire; Editing by David Goodman, Bernadette Baum and Nick Zieminski)