China inflation nears 12-year high

China's consumer price inflation jumped in February to a near-12-year high of 8.7 per cent.

China's consumer price inflation jumped in February to a near-12-year high of 8.7 per cent.

Inflation in January was 7.1 per cent, and economists had expected a February figure of 8 per cent.

The People's Bank of China, the central bank, raised interest rates six times in 2007, but it has marked time this year even though bank deposit rates yield less than half the inflation rate.

The National Bureau of Statistics blamed the surprising increase largely on the bad winter weather and seasonal price rises due to the Lunar New Year holiday.

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These factors helped boost the cost of food by 23.2 per cent from February 2007. Pork, the staple meat for most of China's 1.3 billion people, cost 63.4 per cent more than a year earlier. Vegetables were up 46 per cent, and food oil rose 41 per cent.