Consumer confidence of Chinese bank card holders fell in October amid continuing inflationary pressure and an interest rate hike by China's central bank, according to an index reading released Tuesday.

The Bankcard Consumer Confidence Index (BCCI), compiled by Xinhua News Agency and China UnionPay, a Chinese association for banking card industry in China, dropped to 85.69 in October, down 0.63 points from September.

Compared with the same month last year, the October BCCI figure was down 1.69 points.

According to the BCCI report, Chinese increased their spending on essential items due to rising prices, with the average amount of per bank card transaction on essential items shooting up 17 percent from September, without giving a specific number.

The National Bureau of Statistics is to release the October consumer price index (CPI) figure this week and many economists expect the CPI to rise 4.1 percent year on year. The CPI figure soared to a 23-month high at 3.6 percent in September.

Rising prices had forced Chinese bank card holders to cut their spending on non-essentials items such as home appliances and entertainment in October.

According to the BCCI report, the average amount of per bank card transaction on non-essential items dropped by 9.2 percent in October from September.

Last month's interest rate hike of 0.25 percentage points by the People's Bank of China, the country's central bank, raised inflationary expectations among the public, who fear price rises will continue in the near future.

Xinhua News Agency and China UnionPay jointly started compiling the BCCI index in April 2009 based on bank card transaction data and analysis of structural changes in urban consumption.

(Xinhua News Agency November 9, 2010)