China's inflation rate accelerates to a 37-month high to 6.5 % in July

China's consumer price index (CPI) accelerated to 6.5 per cent in July the National Bureau of Statistics revealed today.

Inflation in China was higher than expected in July, but in line with analysts expectations despite the government  having raised bank rates five times since October 2010.

Analysts say China's central bank, People's Bank of China, could further raise the current interest rate of 6.56 per cent  by another 50 basis points by the end of September.

China's growth had slowed from 9.7 per cent in the previous quarter to 9.5 per cent at the end of the June quarter.

China says controlling prices is its top priority after inflation hit a three-year high this June.

In July, inflation accelerated to a 37-month high on surging food costs, putting the government in a tough position with worsening global liquidity in sight.