<p>A 10% rise in food prices pushed the retail price inflation to a 37-month high of 5.54% in November, significantly higher than the Reserve Bank of India's medium-term target of 4% while the industrial output remained in contraction, putting a spanner on any interest rate cut by the central bank in the current fiscal year ending March 31, despite an alarming slowdown in the economy.</p>.<p>Retail food prices, which make up nearly half of the inflation basket, increased 10.01% in November from a year earlier. Food inflation was 7.89% in October. Prices of vegetables, particularly onions, and pulses pushed the food inflation up in November.</p>.<p>However, the core inflation, which refers mainly to the services side, remained at 3.4% implying the demand-led inflation is still low.</p>.<p>Though new crops in January-February is expected to put a lid high vegetable prices in the coming months, sticky pulses and a higher telecom tariff from this month will keep the headline retail inflation on a higher side. Economists believe the CPI inflation can even go above 6% in December and January.</p>.<p>Since the RBI takes retail inflation into account while deciding on its monetary policy, it is expected that it may not cut the key policy repo rate anytime soon.</p>.<p>The industrial production too declined to 3.8% in October but bettered from 4.3% in the previous month.</p>
<p>A 10% rise in food prices pushed the retail price inflation to a 37-month high of 5.54% in November, significantly higher than the Reserve Bank of India's medium-term target of 4% while the industrial output remained in contraction, putting a spanner on any interest rate cut by the central bank in the current fiscal year ending March 31, despite an alarming slowdown in the economy.</p>.<p>Retail food prices, which make up nearly half of the inflation basket, increased 10.01% in November from a year earlier. Food inflation was 7.89% in October. Prices of vegetables, particularly onions, and pulses pushed the food inflation up in November.</p>.<p>However, the core inflation, which refers mainly to the services side, remained at 3.4% implying the demand-led inflation is still low.</p>.<p>Though new crops in January-February is expected to put a lid high vegetable prices in the coming months, sticky pulses and a higher telecom tariff from this month will keep the headline retail inflation on a higher side. Economists believe the CPI inflation can even go above 6% in December and January.</p>.<p>Since the RBI takes retail inflation into account while deciding on its monetary policy, it is expected that it may not cut the key policy repo rate anytime soon.</p>.<p>The industrial production too declined to 3.8% in October but bettered from 4.3% in the previous month.</p>
