The producer price index, the factory-gate inflation gauge, jumped 8.1 percent year on year in April to reach a record high in more than three years, boosted by accelerating energy and raw material prices.

　　"We expect Chinese producers to raise selling prices to help cover the rising input costs amidst continued hikes in raw material prices. Nevertheless, we do expect further pick up in non-food inflation," said Wang Qing, a Morgan Stanley economist.

　　"We maintain our forecast for easing headline inflation ahead. Though it rebounded in April, the latest reading is still below the 8.7 percent seen in February. We reaffirm our call that the index has already peaked."

　　An interest rate increase is not likely in the short term, industry sources said and they pointed out that price interventions were moves more likely to be taken by the government to tame inflation.