China’s Inflation Remains Stubbornly High

Consumer price inflation remains persistently high, though it has eased from July’s peak of 6.5%. September’s number came in at 6.1%, against August’s 6.2%. The summer’s storms and droughts kept food price rises from moderating. The food component of the inflation figure rose 13.4% in September, as it had in August.

With the global economic outlook still uncertain, policymakers at the People’s Bank of China are likely to maintain their policy tightening on hold, but this latest set of monthly numbers won’t do enough to lower inflationary expectations to give this Bystander any confidence that there won’t be another round of interest rate rises or bank capital reserve increases.