Wholesale inflation shot up to an eight-month high in October as food prices, particularly vegetables remained firm and manufactured products also hardened, prompting economists to say that rising price pressures may force RBI to hold interest rates.
Data released by the commerce and industry ministry on Monday showed inflation, as measured by the wholesale prices, rose an annual 1.5% in October, higher than 1.3% in the previous month. It was flat in the year earlier period.
The spurt was led by a surge in core inflation (minus food and fuel) to an 18-month high but the data also brought some cheer, with numbers pointing to a cooling in food inflation. But, month-on-month vegetable and food product prices remained firm.
Core inflation shot up to 1.7% in October from 1% in September. Food inflation eased to 6.4% during the month from near 9.8% in September. Prices of cereals, fruits, egg, meat and fish, and other food articles recorded a month-onmonth decline in October 2020, contributing to moderation in the primary food inflation, economists said.
But, prices of vegetables remained firm, rising an annual 25.2%, while potato prices soared 107.7% during the month. Prices of pulses also stayed firm at 15.9% in October. Economists have ruled out a rate cut for now due to building of price pressures.
Source: Times of India
