Wholesale Inflation Slips to 2.6%

Wholesale inflation eased to 2.6% in September as prices of food articles moderated, reversing the spike in the previous month and triggering demand for a cut in interest rates. The Wholesale Price Index-based inflation had risen to a four-month high of 3.24% in August. It was 1.36% in September 2016.

Industry body CII called for rate cut as both wholesale and retail inflation came in below expectation in September. Data released earlier this week showed retail inflation at 3.28% in September, unchanged from August, as softer vegetable and cereal prices cushioned rise in services inflation.

Core inflation rose to a 35-month high 2.8% in September from 2.6% in August. Inflation in fuel and power category was placed at 9% in September, down from 10% in the previous month.

Inflation is expected to climb up towards the end of the year as the favourable base effect begins to ease.

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