China said today that consumer prices rose at their fastest in over two years in October, raising expectations of another rate hike as Beijing admits it may not meet its 2010 inflation target.
The consumer price index - a key measure of inflation - rose 4.4% year-on-year last month, compared with 3.6% in September, the National Bureau of Statistics said.
It was the fastest pace since September 2008 - the start of the global financial crisis, when consumer prices rose 4.6%. Consumer prices increased 0.7% month-on-month.
The October figure, which outstripped several analysts' predictions, comes as the world's second-largest economy battles to rein in consumer prices and soaring housing costs.
Over the first 10 months of the year, the CPI was up 3%, mainly driven by rising food prices and living costs.
The People's Bank of China last month raised its benchmark one-year lending and deposit rates by 25 basis points each - the first hike in nearly three years.
The central bank yesterday tightened liquidity by ordering banks to set aside more reserves for a fourth time this year. New lending in October fell slightly from the previous month to 587.7 billion yuan ($88.6 billion), the central bank said today.
China's battle to restrain prices comes amid worries that the US Federal Reserve's move to inject $600 billion into the American economy could increase speculative 'hot' money flows into China and fuel inflation.
The head of China's top economic planning agency, National Development and Reform Commission chief Zhang Ping, warned earlier this week that the full-year CPI would exceed the government's 3% target.
Other key data released by the statistics bureau showed the world's second-largest economy displayed signs of slowing last month. Industrial output from China's factories rose 13.1% last month, slower than September's 13.3% rise, as Beijing closed highly polluting operators and rationed power to energy-intensive industries.
Fixed asset investment in urban areas, a measure of government spending on infrastructure, rose 24.4% over the January-October period, slightly slower than the 24.5% in the first nine months of the year.
Retail sales, a key measure of consumer spending, rose 18.6% year-on-year.
