BEIJING — China's inflation accelerated to 7.1 percent in January — its highest rate in 12 years — after devastating snowstorms worsened food shortages, setting back government efforts to cool rising prices, according to data reported today.

Economists warn that inflation could rise further due to high costs for coal and other industrial materials.

"Inflation has been mainly driven by food prices, but higher energy and labor costs are adding upward pressure on prices," said Jing Ulrich, chairwoman of China equities for JP Morgan, in a report to clients.

January's sharp rise in consumer prices was driven by an 18.2 percent increase in food costs from the same period a year ago, the National Bureau of Statistics reported on its Web site.

High inflation could complicate government efforts to keep the fast-growing economy from overheating and add to pressure to let the exchange rate of China's currency, the yuan, rise faster.

China's economy grew 11.4 percent in 2007 and, despite slowing slightly, is expected to expand by at least 9 percent this year.

Economists expect more interest rate increases this year to cool a boom in lending and investment. Authorities have raised rates repeatedly over the past two years to keep growth in check.

Letting the yuan rise faster, especially against the U.S. dollar, could help to cut China's swollen trade surplus by making exports more expensive in foreign currency terms. That could ease a flood of export revenues flowing through the economy that is adding to pressure for prices to rise.

Analysts have boosted inflation forecasts for China since the January storms, which wrecked crops and killed millions of farm animals across the south. Deutsche Bank says inflation could hit a peak of up to 8 percent for the first quarter of the year before it eases.