Inflation slipslides away to 7.10%

The high inflation rate has fuelled expectations of a rise in interest rates when RBI unveils its mid-term policy on Octber 26. The benchmark bank rate is at 6 per cent, the lowest in nearly three decades.

The index of non-food articles’ group plummeted by 1 per cent to 189 points on account of cheaper sunflower (8 per cent), raw cotton (4 per cent), safflower and raw silk (3 per cent each) and gingelly seed and niger seed (1 per cent each).

The index of primary articles’ group declined by 0.3 per cent to 191.1 points even as prices of several food articles remained unchanged, while there was perceptible fall in the price of non-food items. The index was 183.3 points in the year ago period. The food articles’ group index stood firm at the previous week’s level of 189.3 points despite costlier chicken (3 per cent), moong (2 per cent) and wheat, urad and masur (1 per cent).

A rise in consumer inflation, less widely tracked than wholesale price inflation, to 4.16 per cent in the year through August, from 3.19 per cent in the year through July, also strengthened the view of a rise in interest rates.

(With Reuters)