Wholesale price inflation, based on Wholesale Price Index, accelerated to 3.59 per cent in October – a six-month high, driven by higher food prices, according to data released today. Annual wholesale price inflation was at 2.6 per cent in September. The food inflation quickened to 3.23 per cent in October from 1.99 per cent in September. Among the food items, prices of vegetables prices were up 36.61 per cent year-on-year, potato 44 per cent and onion 127 per cent.
Data released on Monday showed retail inflation picking up in October to a seven-month high, driven by faster rises in prices of food and fuel products, dampening chances of an interest rate cut by the Reserve Bank of India (RBI) next month. Consumer inflation in October increased to 3.58 per cent from a year earlier.
Some analysts expect the GST Council’s decision on Friday to slash tax rates on 178 items could marginally lower retail inflation in coming months.
The central bank holds a policy review on December 6.
Prices pressures are building just as the RBI projected last month inflation to rise in October-March to 4.2-4.6 per cent, above its medium-target of 4 percent, while leaving rates unchanged.
Crude prices have rallied, sending Brent crude to its highest since June 2015, a worry for policymakers given that India imports most of its energy needs.