China's low inflation sets the tone for policy easing
Prices were up only marginally from last month, giving Beijing room to further loosen the reins but rising home prices are a worry
China's inflation moderated last month as food price increases decelerated, lifting hopes for policy easing from Beijing.
Concern over a rebound in inflation and property prices may restrict the central bank's motivation to cut interest rates further, though it may still adopt tools to adjust liquidity in the banking system, analysts say.
National Bureau of Statistics data showed yesterday that the consumer price index, a key gauge of inflation, climbed 1.9 per cent in September from a year earlier, slower than the 2 per cent gain in August.
Food inflation climbed 2.5 per cent last month from a year earlier, but rose only 0.2 per cent from August. Non-food prices rose 1.7 per cent on the year and 0.4 per cent on the month, which research institutions said was driven by the government's increases in retail fuel prices as global crude oil prices climbed.
The producer price index, an advanced indicator of prices, dropped 3.6 per cent last month from a year earlier, after falling 3.5 per cent in August.