NEW DELHI (Reuters) -India's wholesale price-based inflation accelerated to a four-month high of 2.36% year on year in October due to elevated food prices, government data released on Thursday showed.
Inflation for October was higher than the 2.2% projected by economists in a Reuters poll, and up from 1.84% in September. Food prices rose 11.6% year on year, compared to a 9.5% gain in September, with vegetable prices soaring 63% on-year, compared to a 48.7% jump in September. Cereal prices rose 7.9% over last year versus an 8.1% rise a month ago. Prices of manufactured products rose 1.5% against a 1% rise in the previous month. Fuel and power prices dropped 5.8% from a 4% fall in September. Headline retail inflation, which is a key gauge for the country's central bank to decide policy rates, has averaged 5% over the past 12 months, but food inflation has held above 8%, as weather shocks elevated prices of vegetables, cereals and other essential food items. In October, retail inflation hit a 14-month high of 6.2% while food prices jumped 10.9%, dashing hopes of an interest cut. India's rate-setting panel had softened its policy stance in October to "neutral" but Reserve Bank of India (NS:BOI) Governor Shaktikanta Das has said the change did not mean there will be a rate cut in the very next meeting.