Published: Wed, November 15, 2017
Markets | By Rosalie Gross

Consumer price inflation at a 7-month high of 3.58% in October

Consumer price inflation at a 7-month high of 3.58% in October

The pound dipped this morning after official figures showed inflation remained unchanged last month.

The spike in consumer price inflation was driven mostly by a doubling of vegetable price index to 7.47 per cent from 3.92 per cent in September, data released by the Central Statistics Office (CSO) showed. It was (-) 22.51 per cent in September.

The YoY CPI in urban areas ruled higher at 3.81 per cent, while in rural India it rose by 3.36 per cent. However, fruits were comparably cheaper in October on a sequential basis.

But Alistair Wilson, head of retail platform strategy at Zurich, said wages are likely to increase by between 2.5 and 3.5 per cent next year, meaning the worst of the squeeze on family finances could be coming to an end. "Similarly, the policymakers should check and address prices of products, including paddy, that are hovering at higher levels and are also of national importance", said Rawat.

Sub-category of food and beverages during the month under consideration recorded a rise of 2.26 per cent over the same period past year.

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New Delhi, facing risks of a widening fiscal deficit this year mainly due to lower growth in revenue receipts, wants the RBI to ease policy rates to support private investments and revive economic growth.

Both wholesale and retail prices edged up in the month of October led by firming up of food prices, especially in the vegetables segment, said FICCI President Pankaj Patel.

During the 23rd Goods and Services Tax (GST) council meeting, tax rates were lowered for 213 items. The average price of the Indian basket of crude oil rose to $56.06 a barrel in October from $54.52 in September. "However, the RBI rate decision may still predicate on the Fed trajectory".

Crude prices have rallied, sending Brent crude to its highest since June 2015, a worry given that India imports most of its energy needs.

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