China’s inflation fell to a five-month low in October, increasing the scope for the country’s central bank to ease monetary policy, Bloomberg reported. The consumer price index rose 5.5% year-on-year in October, down sharply from 6.1% annual increase in September. Lower inflation could encourage Beijing to ease monetary restrictions, particularly as property prices appear to be falling in many parts of the country. “Selective easing is already underway,” said Chang Jian, an economist at Barclays Capital in Hong Kong. Many analysts expect a form of “targeted easing,” in which government support is directed at the small business, public housing and infrastructure sectors. However, economic turmoil abroad and overcapacity remain challenges for the government. “Downside risks from faltering exports and rising housing inventories are building,” said Li Wei, an economist at Standard Chartered. Meanwhile, the statistics bureau reported a 13.2% year-on-year increase in industrial output, down slightly from a 13.8% gain in the previous month, while housing transactions decreased 25% between September and October.