Inflation soared to an 11-year high of 6.9 percent in November, triggering speculation of more tightening measures by the central bank.

The National Bureau of Statistics, which releases the figure, also forecast that annual inflation is poised to surpass 4.7 percent, the highest since 1996, well above the previously set benchmark of 3 percent.

The consumer price index (CPI), a key gauge of inflation, gained a decade-high 6.5 percent in October.

Food costs, which have a hefty one-third weighting in the CPI basket, continue to be the main driving force behind inflation. They rose 18.2 percent year-on-year in November after a 17.6 percent increase in October.

Pork prices saw the biggest increase of 56 percent, followed by a 38.8 percent rise in poultry products.

Local governments have been subsidizing pig farmers to raise more animals after the country was hit by a pork shortfall triggered by a pig cull following the outbreak of blue-ear disease.

"Food prices will start easing after the Lunar New Year (February 7, 2008), as increased domestic production alleviates the supply-demand imbalance," said Sun Mingchun, an economist at Lehman Brothers Holdings Inc.

"But non-food prices, fueled by rising energy and resource costs, may pick up," he said.

Last month, prices of non-food items rose 1.4 percent, compared with 1.1 percent in October. Meanwhile, utility costs, including water, electricity and gas, rose 5.6 percent.

The rising CPI has led to forecasts that the central bank would raise the interest rate by the year-end, the sixth time this year.

"We expect the central bank to respond to the strong inflation data with more tightening measures, including one more rate hike," said Liang Hong, a senior economist at Goldman Sachs Group Inc.

Top decision-makers at the Central Economic Work Conference last week in Beijing decided to change the monetary policy from "prudent" to "tight" to curb inflation.

(China Daily 12/12/2007 page1)