China's money supply growth accelerates but inflation decelerates

China's money supply growth unexpectedly accelerated in October. Bloomberg reports:

M2, the broadest measure of money supply, jumped 17.1 percent to 33.3 trillion yuan ($4.2 trillion) at the end of October after rising 16.8 percent in September, the central bank said on its Web site today. Economists expected growth of 16.5 percent, according to the median of 17 estimates collected by Bloomberg News...

Outstanding yuan loans stood at 22.1 trillion yuan at the end of last month, 15.2 percent higher than a year earlier, the central bank said today. Growth in outstanding loans has slipped from 16.3 percent in July...

Net of redemptions, banks issued 17 billion yuan of new loans last month, down from 26.4 billion yuan a year earlier. October is typically a slow month for new lending.

But the rapid expansion of money supply is producing little inflation at the moment. From another Bloomberg report:

The consumer price index advanced 1.4 percent from a year earlier after rising 1.5 percent in September, the Beijing-based National Bureau of Statistics said in a statement today. That's less than the 1.6 percent median forecast in a Bloomberg News survey of 16 economists...

... Producer-price inflation unexpectedly slowed in October... The producer price index, which shows the price of goods at the factory gate, climbed 2.9 percent from a year earlier, the government said last week, the smallest increase since May.

House prices, though, continue to rise rapidly. From Xinhua Online:

The prices of newly-built houses in 70 major Chinese cities rose an average 6.6 percent in October over the same period of last year, up 0.3 percentage point from the previous month, said the National Bureau of Statistics (NBS) and the National Development and Reform Commission (NDRC) Monday in a joint statement...

Second-hand house prices in these 70 cities rose 5.2 percent in October over the same period last year, 0.3 percentage point faster than September, according to figures from the NBS and NDRC.

The inflation story in the UK is similar, Reuters reporting that factory gate inflation slowed to its weakest rate in 2-1/2 years in October but house prices rose 8.0 percent year-on-year in September, the highest since March 2005.

There also appears little inflation pressures in Japan, Kyodo/Yahoo! News reporting that wholesale prices rose 2.8 percent in October from a year earlier but fell 0.3 percent from September.