mexico citymexican inflation accelerated in july reaching its highest level in more than 21 years led by rising food prices the national statistics institute said tuesday the consumer price index rose 074 in july to push the 12month inflation rate up to 815 from 799 in june reaching its highest level since december 2000 core cpi which excludes energy and agricultural products but includes processed foods rose 062 in july and was up 765 from a year earlier also its highest level since the end of 2000 the bank of mexico is expected to raise interest rates this week for a 10th straight time as inflation remains above its 3 target all but one of the 33 banks polled last week by citibanamex predicted the central bank will increase the overnight interestrate target by three quarters of a percentage point to 85 at thursdays meeting in a second consecutive increase of that size higher food prices are leading the rise in inflation while energy costs have been tamed by government subsidies on gasoline and diesel finance minister rogelio ramirez de la o estimated last week that the fuel subsidies and other measures in a government program to hold down prices of basic products have shaved 26 percentage points off inflation without this package and with that much higher inflation the first thing that would have fallen sharply is household consumption he said higher inflation would also mean greater interestrate increases with an effect on the cost of public and private debt creditcard debt and mortgages he added