After yesterday’s surprise slowdown pushing inflation to its lowest in five years in the UK, the world’s second largest economy experienced a similar unexpected turn.
Consumer inflation in China slowed more than expected to a near five-year low, coming in at 1.6 per cent in September, just under the 1.7 per cent expected and a drop from two per cent in August.
It’s the lowest since January 2010 and even further from Beijing’s target of 3.5 per cent.
Caused by the falling costs of food, fuel and other commodities, the latest figures add to growing concerns that the global economy is slowing. A cooling housing market in the country is also exerting pressure which economists say is the biggest risk to China.
The country faces a rising risk of deflation, although the government is expected to continue rolling out a steady stream of stimulus measures designed to boost the flagging economy.
Most economists believe more aggressive action such as interest rate cuts are off the table unless conditions deteriorate further but, much like the mixed reactions to yesterday's data in the UK, some see a rate rise cut becoming increasingly likely.