Inflation hits 10-year record on high food prices

China's inflation rate hit 6.5% in August, its highest level in more than a decade, the National Bureau of Statistics announced on Tuesday. Consumer price growth was driven by an 18.2% year-on-year rise in food prices, with meat, eggs and vegetable prices up by 49.2%, 23.6% and 22.5% respectively. Non-food prices rose only 0.9%. A situation that began with a pig disease and was made worse by crop damage from recent floods now sees Beijing under pressure to increase interest rates for a fifth time this year, the Financial Times reported. One-year deposit rates stand at 3.6% and People's Bank of China governor Zhou Xiaochuan has already expressed a wish to end the trend of negative real interest rates. China's stock market responded to the news with its biggest one-day fall in more than two months. The Shanghai Composite Index closed down 4.51% at 5113.97.