Consumer inflation on the mainland hit a five-year low last month, underscoring the economic slowdown and adding weight to calls for more monetary easing or stimulus to underpin growth in the world's second largest economy. The headline consumer price index (CPI) climbed 0.8 per cent year-on-year in January, the lowest increase since November 2009, the National Bureau of Statistics said yesterday. Food price rises easing to 1.1 per cent in January from 2.9 per cent in December were the main reason for this, the bureau said. The mainland's two stock exchanges rose by more than 1 per cent yesterday, led by financial firms, on speculation that lower inflation might trigger fresh liquidity injections. The People's Bank of China cut the reserve requirement ratio (RRR) for banks last Thursday for the first time since May 2012. HSBC Global Research economists said that besides falling energy prices and benign food inflation, core inflation also eased to a multi-year low, suggesting weak domestic demand. Economists with Nomura Securities Asia said the subdued CPI figures were distorted by the Lunar New Year holiday, which falls in February this year but was in January last year. But they said underlying disinflationary pressures had risen, with CPI inflation easing across the board, and that this was evident in producer price index (PPI) deflation. The PPI fell 4.3 per cent in January from a year earlier - compared to 3.3 per cent in December - to its lowest since October 2009, the NBS said. "Together with the weak trade data released over the weekend, which also points to weak domestic demand, pressures will increase on the People's Bank of China [for greater monetary easing]," HSBC said. In its report yesterday on fourth-quarter monetary policy, the Chinese central bank said action would be required if tumbling oil prices affected core inflation, but warned against "over-reacting to oil price fluctuations". Jianguang Shen, chief China economist with Mizuho Securities Asia, said the CPI data highlighted deflationary pressures from "lower imported commodity prices, weak domestic demand and excess manufacturing capacity". Shen said the deflationary risk allowed for more drastic monetary easing, as real interest rates at current levels were too high to support economic growth. HSBC expects a rate cut of 25 basis points in the first quarter. Mizuho's Shen expects as many as five RRR and three interest-rate cuts to be announced this year.