Retail inflation jumps to 7-month high of 3.6% in October

Retail Inflation touches 7-month high of 3.58% in October

CPI is the main price gauge that the Reserve Bank of India (RBI) tracks.

The increase in the CPI inflation in October 2017 was quite broad-based, led in part by an unfavourable base effect, a surge in inflation for vegetables and a rise in price levels for eggs and milk.

The prices of food products, which have the highest weightage in the product basket that determines the inflation number, grew 2.26 per cent.

Fall in pulses price keeps rise modest; housing, fuel up. Data released by the Central Statistics Office (CSO) on Monday showed inflation, as measured by the consumer price index, rose an annual 3.6% in October, higher than previous month's 3.3%. Similarly, rural inflation rose to 3.3 per cent from September's 3.15 per cent and August's 3.22 per cent, and urban inflation has gone up to 3.81 per cent as compared to 3.44 per cent in September and 3.35 per cent in August. Crude prices have rallied, sending Brent crude to its highest since June 2015, a worry given that India imports most of its energy needs. The cities have been the most hit as vegetables have costlier by 11.67 per cent, while villages have seen a rise of 5.23 per cent.

Inflation for the month of October stood at 4.20 per cent in 2016. "We continue to expect an extended pause amid non-unanimous voting by the MPC in the December 2017 policy review", said Aditi Nayar, an economist at ICRA. Moreover, the pass-through of the goods and services tax (GST) to final prices of various goods and services may not be complete. June was the first month the inflation fell outside the band since inflation targeting was first adopted by India.

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