Bad news for Mexican consumers — inflation rose again in April to an annualised rate of 5.82 per cent, beating market forecasts and rising at the fastest pace since May 2009. Even worse — analysts believe things will still get a bit worse before they get better.

The annualised rate is nearly double the central bank’s target of 3 per cent, plus or minus one point. It reflects the knock-on effects of a surge in fuel prices and weakness in the peso currency earlier this year, and showed inflation spreading from energy prices to the wider basket of goods. The monthly rise clocked in at 0.12 per cent, twice the forecast 0.06 per cent increase.

Although energy price rises have slowed a shade since the government pumped up fuel prices by as much as 20 per cent on New Year’s Day, they remained high at nearly 16 per cent.

It was the tenth monthly rise in inflation in a row and means the central bank “can be expected to stay more hawkish than US monetary policy in the rest of 2017, even if the peso’s recent recovery holds,” according to Bill Adams, senior international economist at PNC Financial Services Group.

Many economists still expect the central bank to hold on May 18 and wait until the June 22 meeting to increase rates.

Consumer demand has been driving the Mexican economy in the past few years, and Mr Adams said shoppers would feel the pain.

“Inflation is constraining Mexican consumer spending. Mexican real consumer spending inched 0.1 percent higher in February from January, but spending on domestically produced goods and services fell 0.2 percent, with spending on imported goods up 4.9 percent on the month – the odd monthly spike likely reflects residual seasonal variation in the data or residual effects of surging peso-denominated prices of imports, rather than growth in volumes,” he wrote in a note to clients.

Ironically, the outlook for Mexico’s economy overall has improved since the start of the year, when fears about the future of the North American Free Trade Agreement led many economists to slash their growth forecasts. Some have now started putting them up again.

Pantheon Macro said in a note: