Data here: China October CPI: 1.9% y/y (expected 1.8%) & PPI 6.9% y/y (6.6%)
CPI hit a nine-month high in October & highest since January
- Still below government's target of about 3%
PPI came in at the rate as September, the highest since March
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Capital Economics on the strong inflation data, cite:
- still-solid economic growth
- tight labour market
- government's continuing drive to reduce excess industrial capacity
- campaign to curb factory production during the winter to reduce air pollution
"Price pressures may remain strong for a while longer as the anti-pollution campaign keeps commodity prices elevated and this feeds through into core inflation"
"But with the economy likely to slow in the coming quarters and commodity prices set for an eventual correction, price pressures should start to ease before they trigger a policy response."
