<div id="readability-page-1">* Producer price index highest since July 2022 on commodity price gains * Consumer prices rise 1.2% y/y as gasoline and gold jewellery prices surge * Inflation unlikely to lead to policy moves, analysts say (Adds comments from analysts, details from data, market reaction) By Yukun Zhang and Liz Lee BEIJING, May 11 (Reuters) - China's producer prices blew past expectations to rise to a 45-month high in April, while consumer inflation also accelerated as global energy costs remained elevated, piling more pressure on manufacturers already grappling with weak demand at home. Analysts said cost-push factors, however, were unlikely to trigger policy moves as they lessen the urgency for looser monetary policy to support growth. Price levels will also likely remain below the official target range for inflation, they said. The producer price index (PPI) increased 2.8% from a year earlier, National Bureau of Statistics (NBS) data showed on Monday, exceeding a 1.6% rise forecast in a Reuters poll. The gauge had reversed a 41-month declining streak in March when prices rose 0.5%. &#34;The fallout from the Iran war pushed up inflation again in April, but price pressures remain narrow in scope and aren't likely to build into a wider reflationary impulse,&#34; Capital Economics analysts said. On a month-on-month basis, PPI rose 1.7% in April after climbing 1% in March. The NBS attributed higher factory-gate inflation to rising prices in sectors such as non-ferrous metals, oil and gas and tech equipment, according to statistician Huo Lihui in a statement. Chinese policymakers have repeatedly vowed to boost weak domestic consumption, curb excessive market competition and drive a rebound in prices as deflationary pressures weigh on businesses' profit margins. Inflation driven by external price shocks, however, does not indicate an improvement in the supply-demand balance and could spell new headaches for the export-led economy. Prices still face upward pressure as oil prices are unlikely to return to levels before the war, but inflation is expected to only have a limited impact on policy, said Xu Tianchen, senior economist at the Economist Intelligence Unit. Rising global energy costs are also pushing the cost of living higher. China's state planner has raised retail prices of gasoline and diesel since the U.S.-Israeli attacks on Iran began in late February, although it has capped the increases to blunt the impact on consumers. Major Chinese airlines have ramped up fuel surcharges for domestic flights. The consumer price index (CPI) rose 1.2% year-on-year in April versus a 1% increase in March, driven mainly by price swings in gasoline and gold jewellery, according to the NBS. Economists polled by Reuters had expected a 0.9% rise. Higher living costs could further subdue household consumption, which has remained sluggish during a slowdown in overall economic growth and a years-long property market slump. Food prices dropped 1.6%, with pork prices down 15.2%. Core CPI, which excludes volatile ​food and fuel prices, grew 1.2% from a year earlier compared with a 1.1% increase in March. On a monthly basis, CPI ticked up 0.3% versus an expected 0.1% dip and compared with a 0.7% drop in March. The benchmark Shanghai Composite index was up 0.9% by midday, while the blue-chip CSI300 index gained 1.4%. WILL INFLATION LAST? China's year-on-year PPI reading turned negative in October 2022, marking the start of a years-long deflationary streak as growth momentum faltered and demand at home, worsened by a property downturn, could not absorb manufacturers' capacity. A government campaign to curb excessive capacity and price competition in key industrial sectors, such as in solar panel and auto manufacturing, had helped moderate producer price deflation. But the headline reading only turned positive in March when supply chain shocks boosted energy prices. &#34;It is possible that cost-push pressures work their way through to wider inflation over the coming months. But with overcapacity in most sectors unresolved and domestic demand growth still sluggish, the ingredients for a sustained reflationary impulse still appear to be missing,&#34; Capital Economics analysts wrote. Beijing's sizeable energy reserves and diversified supply mix have cushioned its economy from the impact of energy supply disruptions in the Middle East, and its exports remained resilient this year due to robust demand for AI-related goods and as firms stockpiled components on fears over rising material costs. China's export engine is vulnerable to swings in demand from global trade partners, many of whom are scrambling to contain the fallout from the Middle East conflict. (Reporting by Yukun Zhang and Liz Lee; Editing by Jacqueline Wong)</div>

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China's producer price index (PPI) surged to a 45-month high in April, rising 2.8% year-on-year, driven by increased commodity prices, particularly in non-ferrous metals and energy. Consumer prices also rose by 1.2% year-on-year, influenced by higher gasoline and gold jewelry prices. Despite these inflationary pressures, analysts believe that significant policy changes are unlikely, as inflation remains below the official target range. The economic outlook remains cautious due to weak domestic demand and ongoing deflationary concerns in various sectors.

- China's Producer Price Index (PPI) rose 2.8% in April, the highest level in 45 months, driven by increased commodity prices, while Consumer Price Index (CPI) increased by 1.2% largely due to surging gasoline and jewelry prices.  
- Analysts indicate that inflation pressures are not expected to prompt policy changes, as concerns over economic growth persist amid weak domestic demand and ongoing trade conflicts.  
- The rising costs of living could further dampen household consumption, compounding challenges in a slowing economy marked by a prolonged real estate downturn.

China's factory inflation hits 45-month high on energy price shock