(Bloomberg) -- Mexico’s annual inflation accelerated slightly in November, sounding a note of caution after the central bank signaled an interest rate cut is on the table in the coming months.

Consumer prices rose 4.32% compared to the same period a year earlier, up from 4.26% in October, the national statistics institute reported Thursday. The print was below the 4.39% median estimate of analysts surveyed by Bloomberg. 

Core inflation, a closely watched metric that strips out volatile items like fuel, slowed to 5.3% from 5.5% a month earlier, versus an estimate of 5.33%.

Banxico, as the central bank is known, softened its forward guidance when delivering a fifth-straight hold of its record high 11.25% key rate in November, saying it would maintain the current level “for some time” rather than its previous language of an “extended period.” It targets inflation at 3%, plus or minus one percentage point.

Economists surveyed by Banxico in December see average inflation for 2024 just hitting the top of the bank’s target range, at 4%. The institution will also be grappling with the inflationary impact of a 20% minimum wage increase next year, announced by President Andres Manuel Lopez Obrador last week. 

“With the minimum wage increase and the 2024 budget planning a high deficit, the most since 1988, inflation will keep accelerating” into next year, said Gabriela Siller, director of economic analysis at Banco Base.

--With assistance from Rafael Gayol.

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