SHI TING

China's consumer price index rose 4.3 per cent last month - a sharp drop from the 5.2 per cent registered in September, National Bureau of Statistics figures show.

The slowdown will help alleviate pressure on the central bank for another interest rate rise.

The CPI growth last month was the slowest since May, when the index rose 4.4 per cent year on year.

If averaged over the first 10 months of the year, the CPI - a key measure of inflation - rose 4.1 per cent year on year. The official target for price rises for the whole year is 3 per cent.

The People's Bank of China raised interest rates last month for the first time in nine years, partly in response to inflationary pressure as CPI growth had been hovering around 5 per cent for three months.

"It is a positive number that China's policymakers would love to read," said Zeng Gang , a researcher from the Chinese Academy of Social Sciences.

"I don't think that the central bank would go for another rate rise - at least not until the end of the year."

Stabilisation in food prices was the main factor in the slowing of CPI growth, Mr Zeng said.

Food prices rose 10 per cent year on year last month, compared with 13 per cent in September.

The three percentage-point difference could account for a 0.9 percentage-point drop in CPI growth since food prices contributed to a third of the index, Mr Zeng said.

Producer prices, whose fluctuations are eventually passed on to consumers, rose more rapidly last month than in September.

Meanwhile, the mainland's money supply grew by 13.5 per cent year on year last month, well within the government's annual target of 17 per cent, suggesting that the central bank's efforts to reduce cash in the banking system were working.

M2, the broad measure of money supply, came in 0.4 percentage points lower than the 13.9 per cent growth rate in September, the People's Bank of China said.

Additional reporting by Agence France-Presse