(Bloomberg) -- Mexico’s headline inflation accelerated slightly more than expected in July, boosting the chances that the central bank keeps its key rate unchanged for a third straight meeting later Thursday.

Consumer prices rose 5.57% in July from a year earlier, above the 5.53% median estimate of economists surveyed by Bloomberg, and higher than June’s 4.98% reading.

Core inflation, which is closely watched by the central bank and excludes volatile items like fuel and food, slowed to 4.05% from 4.13% the prior month, just above the median estimate of 4.02%. The central bank targets inflation at 3%, plus or minus one percentage point.

Banxico, as the central bank is known, maintained borrowing costs unchanged at 11% in a split decision on June 27, with one board member voting for a quarter-point cut. The decision to keep rates unchanged for a second straight month was influenced by persistent price increases and Mexican peso volatility following June’s presidential election.

Governor Victoria Rodriguez Ceja has said recent progress in the disinflation process would allow the bank to discuss lowering rates in the future. On March 21, Banxico cut its key rate for the first time since 2021 in a split decision, finally joining a regional trend for monetary easing. But since slowing to 4.4% in February, the annual headline rate has increased more than a full percentage point.

Analysts in a Citi survey published Aug. 6 expect the central bank’s next rate reduction to come in September, a month later than survey posted July 22. They raised their 2024 year-end inflation forecast to 4.6% from 4.4% previously, and to 3.9% for year-end 2025 from 3.85%.

--With assistance from Rafael Gayol.