Here’s a chart we can all understand (hopefully) - the relentless rise of Chinese inflation:
Inflation hit 7.1 per cent in January, the fastest rate of price growth since September 1996. While there was no immediate stock market reaction (the Shanghai Composite closed 2.1 per cent higher on Tuesday) and there is widespread belief that because of the recent snow the Chinese authorities will hold back from any harsh combative action.
But John Kemp of Sempra Metals notes:
Past experience suggests the People’s Bank of China (PBC) may announce a further rate rise and/or increase in reserve requirements and lending controls later today, once the markets are closed, certainly by the end of the week.
