China consumer inflation nudges higher

Inflation in China pushed higher last month, official data showed on Thursday, driven by rising food prices.

According to the National Bureau of Statistics, the consumer price index rose 1.8% year-on-year, in line with consensus and following a 1.6% increase in November.

Pork prices jumped 22.2% in December, although that is down from a peak of 51.8% in October. Excluding food, CPI was unchanged at 1.1%.

Producer price inflation, meanwhile, decreased 0.7% year-on-year compared to 1.3% decline in November. Economists had been expecting a fall of 0.1%. China’s manufacturing sector has struggled after Beijing abruptly abandoned its policy of zero-Covid, leading to a wave of infections across the country.

Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said: "Nothing in the inflation data is likely to worry the People’s Bank of China or tie its hands when it comes to monetary policy.

"Both producer and consumer prices have been relatively stable given the turbulent economic situation, and supply chain issues appear more limited than during the wrenching second quarter 2022 lockdown."