New Delhi: Retail price based consumer inflation spiked to a 16-month high of 4.62 per cent in October on costlier food items, reducing the headroom for a rate cut by the RBI in its monetary policy due next month.
The inflation based on Consumer Price Index (CPI) was 3.99 per cent in September and 3.38 per cent in October 2018.
The earlier high was reported in June 2018 when the retail inflation print was recorded at 4.92 per cent.
The inflation in the food basket spiked to 7.89 per cent in October 2019 as against 5.11 per cent the preceding month, showed the data released by the Central Statistics Office under the Ministry of Statistics and Programme Implementation (MoSPI) on Wednesday.
During the month, the prices of vegetables spiked to 26.10 per cent from 5.40 per cent in September, while for fruits it jumped to 4.08 per cent from 0.83 per cent.
Likewise, the prices of cereals, meat and fish, eggs grew at a faster pace of 2.16 per cent, 9.75 per cent and 6.26 per cent, respectively. For pulses and related products, retail inflation rose to 11.72 per cent.
However, the prices of fuel and light category continued to witness downward move at (-) 2.02 per cent as against (-) 2.18 per cent a month earlier, showed the data.
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Retail inflation has risen above the RBI's limit. As per the mandate, the RBI is obliged to maintain the retail inflation at 4 per cent with plus or minus 2 per cent relaxation.
As the latest inflation data breaches the RBI’s comfort level, the Central Bank will keep the key interest rates unchanged at the existing levels.
