Published: Wed, September 13, 2017
Business | By Max Garcia

Annual CPI Inflation up to 2.9%

Annual CPI Inflation up to 2.9%

The area saw prices rise by 4.6 per cent in the 12 months to the end of August, compared with 3.2 per cent in July.

India's consumer inflation rate rose to a five-month high in August, while factory output remained sluggish, government data showed on Tuesday, suggesting the broader economy has yet to recover from the hit it took from the demonetisation decision on November 8 past year.

In the last month, July, the retail inflation was chiefly driven by hardening of prices in sugar and confectionery items, pan, tobacco, and intoxicants.

Inflation rose to 2.36 percent in July, after consistently falling for three straight months.

"The Bank of England will decide on Thursday whether to raise rates in order to curb inflation with today's higher-than-expected pick-up cranking up the pressure on the central bank's policymakers", The Daily Telegraph reports.

At 3.36% in August, the consumer inflation rate remains moderate, but retail prices are seen rising as demand picks up ahead of the festive season and food prices spike because of drought-like situation in many states.

"We expect the RBI to maintain status quo on policy rates at the October monetary policy meet".

There has been a bigger-than-expected jump in the rate of inflation, to 2.9% last month, aided by a Brexit-related leap in clothing costs.

A broader calculation of the CPI, which includes housing costs, also rose at a faster pace in August than July.

Industrial Production Index registered 1.2 per cent growth in July as compared to the same month of a year ago.

Clothing and footwear was one of four sub-sectors of the ONS's basket of goods that saw price growth reach a four-year high last month.

While overall inflation is on the rise, wage growth in Britain has stalled, with some analysts putting the blame partly on Brexit uncertainty, which has seen companies hold back from hiring. The price of petrol rose by 1.8p a litre to 115.7p in August, while diesel picked up by 2p to 117.6p. The annual growth was forecast to increase to 2.8 percent. Household goods and services inflation was 4.24%.

Manufacturing production also grew slightly by 0.1 percent after a 0.5 percent contraction in June due to the economic reforms.

Sterling has lost 8.3% versus the dollar since the United Kingdom voted to leave the European Union in June past year and is almost 15% lower against the euro over the same period.

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