Gauge pierces past 6%, may push back rate cut
Continuing rise in food prices driven by vegetables and edible oils lifted the Consumer Price Inflation (CPI)-based index to a 14-month high of 6.2%, a touch above the Reserve Bank of India’s tolerance band of 4-6%.
Food inflation rose to 10.9%, its highest since July 2023. On the positive side, core inflation stayed below 4% for the 11th consecutive month, while fuel inflation was negative for the 14th month in a row.
Inflation in vegetables surged to 42.2% due to excess rains in pockets.
The surge in edible oil inflation in October (from 2.5% to 9.5%) was driven by global prices that saw a steep (27% on-year) rise because of supply disruptions in Southeast Asia.
Though benign, non-food inflation inched up to 3.1% from 3% as core inflation rose to a 10-month high of 3.8% driven by higher gold and silver prices. Discounting the bullion prices, the uptick in core was marginal.