UPDATE 1-Mexico inflation accelerates in February

(Adds details on inflation report, background)

MEXICO CITY, March 9 (Reuters) - Mexican inflation accelerated more quickly than expected in February to its fastest pace in five months, keeping pressure on the central bank to raise borrowing costs despite a weak economy.

Higher government-set prices for everything from water to gasoline and bus fare drove inflation during the month, pushing the annual inflation rate to 4.83 percent, the central bank said on Tuesday.

That is the fastest pace since September.

Consumer prices rose 0.58 percent in February, higher than the 0.5 percent reading anticipated by analysts in a Reuters poll.

Many economists expect Mexico's central bank will raise interest rates after mid-year to try to cool inflation. Central Bank Gov. Agustin Carstens told Reuters last month that the policymakers still do not have to raise rates.

Carstens has argued that higher government-set prices will only have a one-time affect on inflation and the economy continues to perform below its potential.

However, he said policymakers will be looking out for companies going overboard in passing on higher costs to consumers after a tax hike that took effect in January.

Yields on interest rate swaps were little-changed following the inflation report, suggesting investors were holding their views on when the bank could rates rates.

Closely watched core inflation MXCPIX=ECI, which strips out some volatile food and energy prices, was 0.40 percent during the month. (Reporting by Jason Lange and Patrick Rucker, Editing by Chizu Nomiyama)