Higher food prices accelerate India's retail inflation in October

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Higher food prices accelerate India's retail inflation in October

The Central Statistics Office (CSO) and the Ministry of Statistics and Programme Implementation, in a latest report, said the Consumer Price Index (CPI) based inflation was 3.28 per cent in September, 4.2 per cent in October past year.

India's retail inflation picked 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 central bank next month.

Meanwhile, Jacob Deppe, head of trading at online trading platform Infinox, suggested the latest inflation data is likely to ease the pressure for another interest rate rise in the next few months.

Inflation in Britain held steady at a five-year high of 3 percent in the year to October, just below the level that would have forced the governor of the Bank of England to write to the government explaining why prices are rising by more than a percentage point above target.

The increase was led by firming up of food prices with vegetables segment remaining a key stress point at this juncture, said Pankaj Patel, President, FICCI.

Analysts polled by Reuters had expected October's CPI inflation rate would edge up to 3.46 percent from September's 3.28 percent.

According to the data released by the Ministry of Commerce and Industry here on Tuesday, the index for this major group rose by 2 percent to 133.4 (provisional) from 130.8 (provisional) for the previous month.

The rise compares with a 3.01 percent increase forecast by economists in a Reuters poll.

Higher inflation was also noted in protein rich items like oils and fats, eggs, and milk (and its products).

The Retail Price Index (RPI), a separate measure of inflation, was 4% last month, up from 3.9% in September. "However, cut in excise duty announced by the government tempered the price increase in fuel".

"However, this is due to adverse weather conditions and the situation should ease out in the coming months", he said. "However, the RBI rate decision may still predicate on the Fed trajectory".

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