From Capital Economics:
• Policymakers are likely to look through the latest pick-up in consumer price inflation and focus instead on evidence of cooling economic momentum, including slower core inflation and weaker factory gate price pressures.
• Consumer price inflation rose in September, from 2.3% y/y to 2.5% (both the Bloomberg median and our forecast were 2.5%). Seasonal spikes during Chinese New Year aside, this is the highest reading since May 2014. But higher food prices due to African swine flu and bad weather are entirely to blame – pork prices rose 3.7% m/m last month and vegetable prices jumped almost 10%.
