BEIJING: China said that consumer prices rose in January for the third straight month, amid mounting fears over how Beijing will tackle the problem of inflation.

The consumer price index, the main gauge of inflation, rose by 1.5 per cent in January compared with the same month a year earlier, the National Bureau of Statistics announced. The increase was mainly driven by food prices, which rose by 3.7 per cent during the first month of the year, data showed. Inflation slowed from December, when prices rose by 1.9 per cent. Analysts welcomed the January figure, which was lower than expected.

“This is good news for the market,” Qian Qimin, an analyst for Shenyin Wanguo Securities, told Dow Jones Newswires. “The inflation being slightly lower means less possibility for tightening measures in the near-term, but the upside is limited as there’s thin trading amid holiday mood,” Qian said.

Markets will be closed in China next week for the Lunar New Year holiday.

China took steps last month to calm growing inflationary pressures, as well as soaring stock and property prices caused by runaway bank lending, which doubled in 2009 from a year before to 9.6 trillion yuan ($1.4 trillion). The People’s Bank of China twice raised the interest rate on its benchmark three-month treasury bills in a bid to deter new lending, following an earlier move on its benchmark one-year treasury bills.

Chinese banks have also been ordered to increase their capital reserves — effectively limiting the amount of money they can lend — amid mounting fears over bad debts as consumers go on a spending spree on property and cars. New lending in January totalled 1.39 trillion yuan, down about 14 per cent from a year earlier, China’s central bank said.