Consumer price inflation in China increased to its highest level in 11 years last month, largely driven by a continued rise in food prices. The consumer price index rose 6.5 per cent year on year in October, according to the National Bureau of Statistics. This figure compares to the 6.2 per cent inflation figure recorded in September, and 6.5 per cent in August.
Food prices were again blamed for accelerating inflation, jumping 17.6
per cent year on year. Pork meat witnessed the steepest rise, up 54.9
per cent, while vegetable prices rose 29.9 per cent. Non-food items
rose 1.1 per cent.
The new inflation high seems certain to spark another round of monetary
tightening as China struggles to rein in inflation, and further
interest rate hikes seem likely. However, those measures are aimed more
at restricting property and investor speculation, rather than as a
panacea for food price inflation. China has conceded that its inflation
fight isn’t going according to plan: late last week, the People’s Bank
of China revised its end-of-year inflation prediction from 3 per cent
to 4.5 per cent.
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