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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
","elementId":"f360f36b-68cb-4691-91e1-b5ee0a0581e9"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
Consumer prices across China are falling at the fastest pace in 15 years, as its economy struggles with weak demand.
","elementId":"281c6eec-65c8-4ee6-8eec-7f06198e10c1"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
China’s consumer price index fell 0.8% year-on-year in January, data released this morning showed. It’s the fourth straight month of declines, and the biggest contraction since 2009 after the financial crisis.
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The inflation rate was dragged down by falling food prices, which dropped by 5.9% year-on-year in January.
","elementId":"8a9dd5b2-2f60-4635-a4aa-f7ba8d9f58b3"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
Pork prices dropped by 17%, and were a major drag on inflation, while fresh vegetables were 12.7% cheaper than a year ago and fruit cost 9.1% less.
","elementId":"ba5c5512-2a8a-4839-b790-5908e11e36ab"},{"_type":"model.dotcomrendering.pageElements.TweetBlockElement","source":"Twitter","id":"1755449162005397830","elementId":"fa55fdb1-5558-400a-a573-a5ec71770f95","hasMedia":false,"role":"inline","url":"https://twitter.com/FinNews_/status/1755449162005397830","isThirdPartyTracking":false,"html":"
🇨🇳#inflation #China #reporting
China – consumer inflation CPI (Jan)
m/m = +0.3% (expected +0.4% / previously +0.1%)
y/y = -0.8% (expected -0.5% / previously -0.3%)Traditionally, the media write about deflation in China
The fall in consumer prices in January was the strongest… pic.twitter.com/75KSrAVMSA
— FinNews (@FinNews_) February 8, 2024
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China’s factories continued to cut their prices last month, too. The producer price index (PPI) slid 2.5% from a year earlier in January after a 2.7% fall the previous month.
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China’s consumer prices dropped into deflationary territory last summer, and prices have been flattish since.
","elementId":"ad3708d3-5953-4562-8c59-45ccb01584de"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
Its economy has struggled as the bounceback following the lifting of Covid-19 restrictions falters, and as its indebted real estates sector contracts.
","elementId":"8d189277-7775-497e-b92c-53da1c373004"},{"_type":"model.dotcomrendering.pageElements.RichLinkBlockElement","prefix":"Related: ","text":"China’s economy is struggling but fears of sustained deflation are premature","elementId":"7ef595e5-3bbc-433c-995b-14804d54ff1d","role":"thumbnail","url":"https://www.theguardian.com/world/2023/aug/09/china-economy-is-struggling-but-fears-of-sustained-deflation-are-premature"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"
The drop in annual inflation puts more pressure on Beijing policymakers to take fresh steps to stimulate the economy.
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China’s stock markets have rallied a little today.
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Kyle Rodda, senior financial market analyst at capital.com, says the markets have “ostensibly reacted favourably” to disappointing Chinese price data.
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\n
While a very concerning sign for China’s economy, which could be becoming entrenched in a debt and deflation cycle, the markets arguably responded in a positive way to the news.
\n
Perhaps markets see the terribly low number as a potential catalyst for more muscular monetary or fiscal stimulus from the central government, which, up until this point, has been moderate in applying countercyclical policy.
\n
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China CPI weakens further to -0,8%. Keeps the deflation story alive but it also adds pressure for stronger government support. #china #dkøko #dkfinans pic.twitter.com/XOScmyKZix
— Frederik Engholm (@FrederikEngholm) February 8, 2024
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The agenda
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- \n
9.30am GMT: Latest weekly data on UK economic and business activity
1.30pm GMT: US weekly jobless claims figures
3pm GMT: Bank of England policymaker Catherine Mann to give speech: “Mind the Gap(s): Inflation Data and Prospects”
\n
\n
\n
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Key events
Introduction: China’s prices fall at fastest rate in 15 years as economy fights deflation
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Consumer prices across China are falling at the fastest pace in 15 years, as its economy struggles with weak demand.
China’s consumer price index fell 0.8% year-on-year in January, data released this morning showed. It’s the fourth straight month of declines, and the biggest contraction since 2009 after the financial crisis.
The inflation rate was dragged down by falling food prices, which dropped by 5.9% year-on-year in January.
Pork prices dropped by 17%, and were a major drag on inflation, while fresh vegetables were 12.7% cheaper than a year ago and fruit cost 9.1% less.
🇨🇳#inflation #China #reporting
China – consumer inflation CPI (Jan)
m/m = +0.3% (expected +0.4% / previously +0.1%)
y/y = -0.8% (expected -0.5% / previously -0.3%)Traditionally, the media write about deflation in China
The fall in consumer prices in January was the strongest… pic.twitter.com/75KSrAVMSA
— FinNews (@FinNews_) February 8, 2024
"}}” config=”{"renderingTarget":"Web","darkModeAvailable":false}”>
🇨🇳#inflation #China #reporting
China – consumer inflation CPI (Jan)
m/m = +0.3% (expected +0.4% / previously +0.1%)
y/y = -0.8% (expected -0.5% / previously -0.3%)Traditionally, the media write about deflation in China
The fall in consumer prices in January was the strongest… pic.twitter.com/75KSrAVMSA
— FinNews (@FinNews_) February 8, 2024
China’s factories continued to cut their prices last month, too. The producer price index (PPI) slid 2.5% from a year earlier in January after a 2.7% fall the previous month.
China’s consumer prices dropped into deflationary territory last summer, and prices have been flattish since.
Its economy has struggled as the bounceback following the lifting of Covid-19 restrictions falters, and as its indebted real estates sector contracts.
The drop in annual inflation puts more pressure on Beijing policymakers to take fresh steps to stimulate the economy.
China’s stock markets have rallied a little today.
Kyle Rodda, senior financial market analyst at capital.com, says the markets have “ostensibly reacted favourably” to disappointing Chinese price data.
While a very concerning sign for China’s economy, which could be becoming entrenched in a debt and deflation cycle, the markets arguably responded in a positive way to the news.
Perhaps markets see the terribly low number as a potential catalyst for more muscular monetary or fiscal stimulus from the central government, which, up until this point, has been moderate in applying countercyclical policy.
China CPI weakens further to -0,8%. Keeps the deflation story alive but it also adds pressure for stronger government support. #china #dkøko #dkfinans pic.twitter.com/XOScmyKZix
— Frederik Engholm (@FrederikEngholm) February 8, 2024
"}}” config=”{"renderingTarget":"Web","darkModeAvailable":false}”>
The agenda
9.30am GMT: Latest weekly data on UK economic and business activity
1.30pm GMT: US weekly jobless claims figures
3pm GMT: Bank of England policymaker Catherine Mann to give speech: “Mind the Gap(s): Inflation Data and Prospects”
