Colombia’s central bank unexpectedly raised its benchmark policy rate by 25 basis points to 12.25%, the highest level since early 2024, as it seeks to bring inflation back toward its 2%-4% target range after years of above-target price growth. Four of seven board members backed the increase, two preferred no change and one supported a 50-basis-point hike. Annual inflation accelerated to 6.24% in August and is expected to remain above the target range’s upper boundary through 2026 and 2027. The board said the restrictive stance was consistent with inflation declining in 2027. The decision came as urban unemployment rose to 9.1% in August and July economic activity, manufacturing and retail sales undershot forecasts, while a widening budget deficit raised fiscal concerns and prompted the government to seek discussions with the IMF.