Consumer price inflation for the month of February shot up to 3.65% from 3.17% in January due to rise in food and fuel prices which was accompanied by the remonetisation which spurred up consumption of all income groups.
The CPI food inflation spiked up to 2.01% in February from 0.61% in January 2017, Government data showed. Similarly, retail inflation in fuel and power shot up to 3.9 per cent in February this year. But year-on-year CPI inflation is much lower as in February 2016, it was 5.3%, Bureaucracy Today has learnt..
Earlier in the day, data showed the annual rate of inflation, based on monthly Wholesale Price Index, shot up to 6.55% for February 2017 against 5.25% in January this year, led by price rise in food articles, power and fuel costs. This is the highest spike in WPI based inflation growth in the last 39 months. Food articles prices grew by 2.69% as compared to a deceleration by 0.56 per cent in the previous month and a high 21% rise in fuel and power costs against 18.14% in January have pushed up the WPI annual inflation rate for February.
Rating agency ICRA said WPI inflation is led by unfavourable base effect, higher prices of perishables and lagged vision in crude oil sub index.
With both the inflations are up, the possibility of RBI going for a rate cut any time soon is almost negligible. Last month, in the monetary policy, RBI did not cut the bank rate and shifted to neutral from accomodative policy showing a hardened credit policy in the time to come.