October CPI touched a 7-month high of 3.58%

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However, compared to the September's figure of 3.28%, it showed a recovery of 0.3% to hit a seven-month high of 3.58 per cent in October, the Central Statistics Office (CSO) data showed. A vendor arranges vegetable at his stall in a market in Mumbai, November 13, 2017.

Combined food inflation in October was 1.9% in October, compared with 1.25% a month ago as vegetable prices increased by 7.47% from 3.92% in the previous month.

Food prices climbed 1.9% from a year earlier, accelerating from a 1.25% rise in September while fuel prices rose 6.36%, quicker than September's 5.56% increase.

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Last month, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) forecasted that retail inflation will hover around 4.2-4.6 percent between October-March this year, higher than the previous projection of 4-4.5 percent.

The Reserve Bank of India is expected to cut the repo rate by 25 basis points during its December meeting.

Aditi Nayar Principal Economist at ICRA said "The staggered impact on the housing index of the CPI, of the revision in HRA of central government employees, is likely to push up housing inflation further over the coming year". June was the first month the inflation fell outside the band since inflation targeting was first adopted by India. Analysts polled by Reuters had expected October's retail inflation at 3.46 percent, up from 3.28 percent in September. New Delhi, facing risks of a widening fiscal deficit this year mainly due to lower growth in revenue receipts, wants the RBI to ease policy rates to support private investments and revive economic growth.

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