Weekly Report - 19 June 2008 (ISSN 1741-7422)

The government announced a deal with food producers on 18 June that temporarily freezes the prices of 150 staple foods. The move is further evidence of the government's worries about inflation (which hit 4.95% in the year to May) and its instinct to make populist responses to economic problems. President Felipe Calderón Hinojosa broke the long standing taboo that politicians should not try and influence the Banco de México by calling, on 4 June [WR-08 -22], for the central bank to cut interest rates despite the rise in inflation.