China's inflation eases ahead of Lunar New Year

BEIJING (AP) - China's inflation eased in January ahead of the Lunar New Year holiday but vegetable prices spiked higher amid unusually cold weather, data showed on Friday.

Consumer prices rose 2 per cent over a year earlier, down from the previous month's 2.5 per cent gain, the government reported. The decline came despite a 37 per cent jump in vegetable prices.

The January decline was due in part to comparison with the same month last year, when food prices spiked up as families stocked up for Lunar New Year banquets. This year's holiday does not begin until this month.

Higher pressures for prices to rise have prompted some analysts to suggest Beijing will respond by tightening credit, possibly complicating efforts to support China's shaky economic recovery.