WPI inflation at 6-month high of 3.59% in October as food & fuel prices zoom

NEW DELHI: Wholesale inflation hit a six-month high in October, driven by an increase in food and fuel prices, in line with a similar spike in retail inflation.

The annual wholesale inflation increased to 3.59% in October from 2.60% in September, data released by the government showed.

Consumer price index released on Monday had showed retail inflation at a seven-month high of 3.58% in October.

The rise in wholesale and retail inflation has dampened chances of a rate cut at the central bank's next review of the monetary policy on December 6.

"The further spike in global crude oil prices as well as domestic vegetable prices, would keep the WPI (wholesale price index) inflation firm in November 2017," said Aditi Nayar, principal economist, ICRA.

"The sharper than anticipated uptick in the WPI inflation reinforces our expectation of a status quo in the upcoming monetary policy review."

Inflation in food articles more than doubled to 4.3% in October from 2.04% in September, driven by a 36.6% inflation in vegetables during the month.

Onions contributed the most to inflation in vegetables, with a spike in inflation to 127% in October, compared to 79.78% in September.

Fuel and power inflation was up at 10.52% from 9.01%, reflecting the sharp rise in cooking gas prices.

The wholesale inflation in manufactured products, which have the largest weight of 64.23% in WPI, eased to 2.62% in October from 2.72% in the previous month. The final print of August WPI inflation remained unchanged at 3.24%.