Rent Increases Push China’s Inflation Higher

A jump in rent prices contributed to an increase in China’s inflation rate during the month of January. Excluding food, prices rose the most in six years to 4.9 percent from one year ago. The news immediately led to further speculation that China will be forced to increase interest rates to ease spending.

“Inflationary pressures haven’t abated and China has already entered into an era of structural inflation,” said Liu Li-gang, an Australia & New Zealand Banking Group economist in Hong Kong. He sees “more monetary policy tightening ahead.”

Source: Bloomberg

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