Retail inflation hits 6.09 per cent in October, breaching RBI limit
Consumer price index based inflation rose from 5.54 per cent in September, exceeding the Reserve Bank of India's upper tolerance limit.
Retail inflation based on the consumer price index (CPI) rose to 6.09 per cent in October from 5.54 per cent in September, breaching the Reserve Bank of India (RBI) upper tolerance limit of 6 per cent for the first time in two years, according to reports by The Times of India, Mint and Rediff.
The surge was largely driven by food inflation, which increased to 8.94 per cent in October from 7.74 per cent in September. Sharp price spikes were recorded for onions at 116.22 per cent, garlic at 60.74 per cent, silver jewellery at 52.39 per cent, ginger at 48.32 per cent and lemon at 47.30 per cent.
Inflation also became more broad-based, with 11 of the 12 food categories recording an uptick. Other rising costs included restaurant and accommodation services at 10.06 per cent and personal care and miscellaneous goods and services at 10.14 per cent.
In six states, retail inflation crossed the 7 per cent mark, led by Tamil Nadu and Telangana at 7.3 per cent, Andhra Pradesh at 7.25 per cent and Karnataka at 7.1 per cent. Rural inflation was 6.6 per cent, while urban inflation stood at 5.4 per cent.
Economists expect the RBI to raise interest rates following the Monetary Policy Committee meeting in December. ICRA chief economist Aditi Nayar expects food inflation to remain elevated in November due to upward pressure from milk, sugar and onion prices.
Bank of Baroda chief economist Madan Sabnavis said core inflation is also expected to rise as FMCG companies have started raising prices, alongside increases in the cost of mobiles, TVs, vehicles and healthcare.