Digital Assets Report

Newsletter

Like this article?

Sign up to our free newsletter

CPI rise in China ‘could worry hedge funds’

China has experienced a rise in inflation during February, which could concern hedge funds looking to invest in the country.

China has experienced a rise in inflation during February, which could concern hedge funds looking to invest in the country.

Its Consumer Price Index (CPI) has risen 2.7 per cent year-on-year, considerably higher than its 1.5 per cent increase in January.

This has raised fears that the economy could overheat if action is not taken to tighten it.

Tao Wang, economist at UBS, has claimed that the government could react by raising interest levels.

She said: “Our forecast is that a rate hike should happen relatively soon, if not this month then probably early in the second quarter.”

Some commentators attributed this rise to increased spending across the Chinese New Year, with many families splashing out for the celebration.

Earlier this month, Ted Scott, director of UK strategy at F&C Investments, warned that the Chinese economy could soon face the same problems that affected 1980s Japan due to a potential asset bubble of credit growing.

Like this article? Sign up to our free newsletter

Most Popular

Further Reading

Featured