Food inflation recorded a double-digit rise to 10.60% in the week ended October 8, the sharpest increase in six months, data on Thursday showed. Just a day earlier, finance minister Pranab Mukherjee had said he could foresee prices declining from December onwards.
Costly vegetables and fruits, whose prices jumped 17.6% and 12% on an annual basis, fanned prices, which rose an annualised 9.32% in the previous week. While non-food prices has shown some decline, suggesting the hiking of interest rates have worked, food inflation continues to be stubbornly high, posing a threat to the government.
Milk went up by 10.80% and eggs, meat and fish by 14.10 per cent. The last time that food inflation stood this high was on April 16 when it was recorded at 11.25 %. "I am concerned… (but) I do believe that food inflation will come down... I believe that the monsoon has an effect on the availability of foodgrains which you will see in the months ahead," said Prime Minister's Economic Advisory Council chairman C Rangarajan.
All eyes will be on the RBI, to know whether it will announce a pause in its interest rates hiking cycle later this month.