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Retail inflation hits five-month high of 5 pc in Jun

Press Trust of India  |  New Delhi 

Retail spiked to a five-month high of 5 per cent in June on costlier fuel, despite easing food prices, reducing possibilities of an cut by the Reserve Bank in its upcoming review.

The retail based on Consumer Price Index (CPI) stood at 4.87 per cent in May. It was 1.46 per cent in June 2017.

The earlier high was in January this year at 5.07 per cent.

As per the data released by the (CSO), the in the was 2.91 per cent, compared to 3.1 per cent in May, due to slower rate of price rise articles such as fruits, vegetables and cereals.

The inflation in fuel and light category, however, went up to 7.14 per cent as against 5.8 per cent in May.

The CSO said the price data for CPI inflation were collected from selected towns by the (National Sample Survey Office) and from selected villages by the

The data further showed that inflation in clothing and footwear category in June stood at 5.67 per cent and in housing 8.45 per cent, both marginally higher over previous month.

The government has mandated the Reserve Bank to keep inflation at 4 per cent (+/- 2 per cent).

The headed Committee (MPC) will be meeting later this month to review regime.

RBI had raised its key short-term benchmark lending rate (repo) by 0.25 per cent to 6.25 per cent after its last MPC meet in June. The rate was raised after almost four-years on inflationary concerns.

The MPC will be meeting for three-days from July 30 and announce its decision on the third bi-monthly policy of the current fiscal on August 1.

Commenting on the data, Chief said, "June inflation number is the likely peak we have seen in this FY. Subsequent prints are expected to average below 4.5 per cent".

The core inflation remains elevated that may keep RBI on guard, she added.

with ratings firm Aditi Nayar expects the MPC to increase the repo rate by another 25-50 percentage points in 2018-19, depending on the extent to which various inflationary and fiscal risks materialise.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 12 2018. 19:05 IST