Consumer Inflation At 2.05% In January, Lowest Since June 2017

Retail inflation eases to 2.05% in January

Retail inflation in January is the lowest since June 2017 when it had touched 1.46 per cent. Consumer Food Price Index (CFPI) inflation stood at (-) 2.17 per cent in January as against (-) 2.65 per cent in December.

Good morning: Did inflation fall below the Bank of England's 2 per cent target in January? Inflation for the "fuel and light" category moderated to 2.20 per cent in January from 4.54 per cent a month ago.

Separate official data showed growth in industrial production - determined by Index of Industrial Production (IIP) - picked up to 2.4 per cent in December.

"The further falling back in inflation facilitates the Bank of England maintaining a "wait and see" approach on interest rates until after the United Kingdom leaves the EU", Howard Archer, chief economic adviser to the EY ITEM Club consultancy, said.

This is the sixth straight month where the inflation has remained below the RBI's medium term target of 4 per cent.

Inflation peaked at a five-year high of 3.1 percent in November 2017, when households faced much greater price increases than the European Union average.

"This reinforces expectations of a rate cut in April", he added. This, combined with a negative base effect, may lead to a four-tick decline of the year-on-year rate to 1.5%.

"We expect headline CPI to retreat to 1.5% thanks to lower gasoline prices", said TD Securities previewing this week's inflation report from the U.S".

Shaktikanta Das, the RBI's new governor, voted for a cut despite only weeks earlier acknowledging the challenges posed by the divergent paths taken by core and food inflation.

The Consumer Price Index inflation rate for rural areas stood at 1.29%, while it was 1.50% in December 2018.

Retail food prices fell 2.17 percent in January from a year earlier, compared to revised fall of 2.65 percent a month earlier.

A vendor sells vegetables at a retail market in Kolkata, December 12, 2018.

This year, other major central banks have also changed to a dovish stance in the face of rising worries about global growth and the impact of the U.S.

Related:

Comments


Other news