Bank of Mexico raises interest rates

The bank decided Friday to increase interest rates by a quarter point to 8 percent. It raised interest rates to 7.75 percent on June 20.

The rate hikes are designed to help slow inflation that hit a pace of 5.26 percent in June, its highest level in nearly four years.

The bank also said it was considering raising its inflation predictions for 2008 to about 3.5 percent from 3 percent because of rising fuel and food costs.

Inflation last year was 3.76 percent.