Hong kong inflation hits 32 month high

Hong Kong’s inflation accelerated to a 32-month high of 4.6 percent in April from a year earlier, driven by higher food and housing rental costs.

Today’s figure, released by the government on its website, matched the median estimate of 12 economists in a Bloomberg News survey and was higher than the revised 4.4 percent gain in March.

The government raised its annual inflation forecast to the highest in 14 years on May 13 on more expensive food, labor and import costs. Hong Kong’s currency peg to the U.S. dollar robs the city of an independent interest-rate policy, leaving the Hong Kong Monetary Authority, de-facto central bank, with limited tools to combat higher prices.

“Inflation is brewing in Hong Kong, fanned by a wide- ranging mix of drivers, with mainland food prices and housing rental costs leading the Pack,” Donna Kwok, a Hong Kong-based economist at HSBC Holdings Plc., said before the report. “The sting of higher prices may cool household spending growth by mid-year.”

Source: Bloomberg