dglobalnews.com China consumer inflation rises 0.9% in March
Published: Thu, April 13, 2017
Markets | By Armando Jensen

China consumer inflation rises 0.9% in March

China consumer inflation rises 0.9% in March

Clothing and footwear price tags were also on the rise last month, climbing by 2% between February and March in contrast to a 1% climb past year.

He predicted the pay squeeze to be "deeper and longer than expected" as prices were expected to rise later this year and wages looked unlikely to increase with them.

The claimant count unexpectedly increased by a seasonally adjusted 25,500 in March, compared to expectations for a decline of 3,000 people and following a fall of 6,100 a month earlier, whose figure was revised from a previously reported reduction of 11,300. Both the March and February readings are the fastest rate since September 2014 and it's the second time that inflation has risen past the Bank of England's 2% target rate in more than three years.

Over on the producer level, the PPI increased 7.6% in March from a year earlier, dropping slightly from the 7.8% increase in February.

Gregory concludes: 'Given the uncertainty around the Brexit negotiations and the fact that there has been little sign of building domestic cost pressures, we continue to think that the MPC will hold off until the middle of next year before raising rates'. Year-over-year growth in wages excluding bonuses fell to 1.9 per cent, from 2.2 per cent, dragging down the ex-bonus headline rate to 2.2 per cent, from 2.4 per cent.

Fuel pump prices were also dragging on CPI.

"Households are being caught in a flawless storm of rising inflation and slowing labour income growth", said Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics.

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Sterling hit its highest level in over a week against the US dollar after the figures as investors focused on a slightly stronger-than-expected rate of nominal pay growth. A falling pound and rising prices are depressing sales, and wages simply can't keep pace with inflation.

The producer price index climbed 7.6% in March compared with a 7.8% year-over-year increase in February.

Wage growth has slipped below the rate of inflation, a development that threatens damage to living standards and the wider economy through an erosion of household spending power.

Inflation remained steady in March as rising food and clothing prices were balanced out a drop in the cost of flights and petrol.

China's economy, a vital engine of global growth, expanded 6.7 per cent for all of a year ago, the slowest rate in a quarter of a century.

March 2016's figure encompassed the rise in flight costs associated with the holiday, but a later Easter in 2017 means the seasonal price rises will be included in April's figures instead. The National Bank of Rwanda (BNR) recently attributed the rising inflationary pressures to rising food prices due to bad weather conditions and transport inflation.

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