Headline inflation in China increased at its fastest rate in nearly three years last month, as persistent price rises fuel social unrest.
Consumer price inflation rose 5.5 per cent in May from the same month a year earlier, the biggest increase in 34 months in spite of concerted efforts by Beijing to rein in surging prices.
The inflation reading prompted the central bank to raise again the proportion of deposits that banks must hold on reserve, a move that reduces liquidity in the economy by cutting the amount of money banks are able to lend.
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