Rising food, vegetable and fuel prices pushed wholesale price inflation to a six-month high of 3.6% in October, dimming hopes of a cut in interest rate when the RBI meets to review monetary policy next month.
Inflation measured by the wholesale price index, rose an annual 3.6% in October, higher than the previous month’s rise of 2.6% and 1.3% increase in October 2016.
The jump in WPI inflation in October mirrors the rise in retail inflation, which accelerated to a seven-month high of 3.6% on the back of an increase in food, fuel and housing prices.
Food inflation nearly doubled to 4.3% in October from previous month’s 2%. Vegetable prices rose an annual 36.6%, while onion prices soared 127% during the month, a sharp jump from previous month’s 79.8% increase. Fuel and power inflation hit 10.5% compared to previous month’s 9% rise.
Policymakers hoped that the rising trend would be reversed soon. Economists said they expect WPI inflation to be around 3.5-4% by the end of the current financial year, but rising global crude could put pressure on domestic prices in the months ahead. They said an increase in excise duty on petrol & diesel last month would also add to pressure.