Mexico looks to squeeze above-target inflation

The Bank of Mexico lifted rates for the second straight month on Friday in a bid to slow inflation which was risen to 5.26% as a result of surging oil and food prices.

The increase in prices is above the central bank's forecast of 5% for the second and third quarters of 2008 and above the target of 4%.

The central bank's policy board raised the cost of borrowing to 8%, the highest rate since December 2005.

The bank said the rate hike was necessary "to reinforce medium-term inflation expectations