China inflation falls to 30-month low

[FT News]

Inflation at the consumer level in China fell to a 30-month low, giving the central bank plenty of room to cut interest rates further to support the economy and stave off the threat of deflation.

Fears that China is facing deflation are mounting after the country’s consumer prices grew at their slowest pace in 30 months years in January and producer prices accelerated their fall.

The consumer price index was up 1 per cent last month from the same period a year earlier, 0.2 percentage points less than in December, the government said. The producer price index dropped 3.3 per cent year-on-year, a sharper fall than the 1.1 per cent recorded a month earlier.

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