Accelerating for the third straight month, the wholesale price index-based inflation hit 1.62% in June on costlier food and manufactured items.
The hardening of the WPI follows an uptick in retail inflation, announced on Tuesday, which hit a 22-month high of 5.77% in June, dampening chances of a rate cut by RBI at its next policy meet scheduled for August 9.
Also, the annual rate of wholesale inflation is way higher than 0.79% in May and (-)2.13% in June 2015.
Food inflation rose 8.18% in June due to higher price of fruits, vegetables, cereals as well as protein-rich items, showed government data which were released on Thursday.
The inflation in vegetables remained stubborn, which jumped 16.91%. The print for pulses came in at 26.61% while potatoes turned costlier by as much as 64.48% in June.
There was some source of comfort though as onion prices declined significantly with a reading of (-)28.60% during the month. Besides, fuel and power and minerals showed a price decline at (-)3.62% and (-)20.75%, respectively.
In the manufactured items category, inflation read 1.17%.
“Rate cut by RBI in August is definitely a no. RBI is likely to maintain a status quo for a significant period of time,” said Indranil Pan, chief economist, IDFC Bank.