Chinese inflation reaches 6.5%

China's consumer price index rose 6.5% in August, prompting speculation that the People's Bank of China will be forced to raise rates again.

The central bank increased its benchmark rate by 18 basis points to 7.02% and its deposit rate by 27 basis points to 3.6% in August in an effort to stabilise inflationary pressures. This was the fourth hike in 2007.

Fast growth in food prices, particularly pork, is behind the inflation.