China Factory Inflation Eases as Consumer Prices Remain Subdued

China’s factory inflation moderated as consumer price gains remained tepid, further reducing a potential source of pressure for policy makers to boost borrowing costs.

While this year’s surge in raw-materials prices will feed through to consumer products next year, headline factory price growth is seen slowing amid higher year-ago base comparisons and moderating investment demand. As top leaders step up pledges to ensure financial stability amid soaring debt, economists say moderate inflation and an outlook for tame price gains gives the authorities less cause to pursue a broad tightening of borrowing costs.