FX.co ★ China Inflation Rate Accelerates as Expected

China’s annual inflation rate quickened to 0.8% in August 2026, up from July’s six-month low of 0.5% and in line with market expectations. Non-food prices rose at a faster pace (1.2% vs. 0.9% in July), driven primarily by a sharp increase in transport costs (2.5% vs. 0.4%), reflecting higher fuel prices and stronger travel-related demand. Additional upward pressure came from clothing (1.3% vs. 1.4%), healthcare (2.7% vs. 2.9%), and education (1.4% vs. 1.3%). By contrast, housing costs remained weak (-0.3% vs. -0.3%).

On the food side, prices fell for the fifth consecutive month (-1.4% vs. -1.5%), dragged down by a further decline in pork prices amid abundant supply and subdued consumption. Month-on-month, consumer prices rose 0.4%, exceeding forecasts of a 0.3% increase and reversing July’s 0.1% decline. This was the strongest monthly gain since February.