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

The GST Council’s decision to cut tax rates on 177 items from 28% to 18% is expected to partially ease inflation going ahead

India Inc. on Tuesday said the rise in inflation numbers for October is in line with the industrys expectations owing to factors like marginal rise in demand together with increase in prices of crude oil and other commodities globally.

Meanwhile following the latest inflation data, "there was a very slight initial drop in the value of sterling as markets anticipate that inflation may not peak beyond 3.0 percent and future interest rate rises may not therefore need to be imminent", Richard Stone, chief executive at stockbrokers The Share Centre, said in a note to clients.

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.

The rate of price rise in the vegetable segment nearly doubled to 7.47 per cent against 3.92 per cent in September. "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. However, fruits were comparably cheaper in October on sequential basis.


However, inflation in various household goods and services declined, implying the goods and services tax (GST) did not have much impact. It was (-) 22.51 per cent in September. Crucial services such as education, healthcare, personal care, etc have seen an inflation of 3.48 per cent.

Prices pressures are building just as the Reserve Bank of India projected last month inflation to rise in October-March to 4.2-4.6 percent, above its medium-target of 4 percent, while leaving rates unchanged.

Food price inflation for rural areas stood at 1.75 per cent in October against 1.31 per cent in September and 3.86 per cent in October 2016.

All eyes will be on the current fiscal's sixth bi-monthly meeting of the Monetary Policy Committee, headed by RBI Governor Urjit Patel, on December 5-6.

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