Acceleration in China's inflation

A jump in house and food pricing as well as an increase in bank lending will fuel concerns that the world's third-largest economy is overheating. One answer would be for Beijing to raise interest rates. According to the China Statistics Bureau, Consumer prices were up 2.8% in April year on year which is the highest rate in 18 months and which exceeded the 2.7% forecast by many analysts.

Property inflation hit 12.8% and new bank lending of 774bn yuan ($8.4bn; £5.65bn) exceeded predictions. Industrial increased 17.8% year-on-year in April, while retail sales were also up 18.5%.

Standard Chartered economist Jinny Yan said he did not think there was an immediate danger of an interest rate rise because of the European debt crisis and fragile international economy. "What [Beijing] will do is observe external markets for a while longer before deciding what to do," she said.

But Brian Jackson, strategist at Bank of Canada, said, "Price pressures have been building throughout the economy, strengthening the case for higher interest rates and a stronger yuan... China is at risk of overheating."

China's economy grew at an annual rate of 11.9% in the first quarter.