Retail inflation hits 4-month high, factory output rises 4.9%

Irving Hamilton
June 13, 2018

India's annual retail inflation accelerated to a four-month high in May, driven by higher fuel prices and a depreciating rupee, strengthening views that the central bank could raise interest rates again in August.

Shoppers browse in an Aldi store in London, Britain, February 15, 2018.

Consumer-price growth stayed at 2.4 percent in May, as forecast by both the Bank of England and economists surveyed by Bloomberg.

"However, these effects have been partly offset by price falls in computer games and energy costs rising by less than this time a year ago".

Ruth Gregory, senior United Kingdom economist at Capital Economics said oil prices are expected to fall later this year and overall "the inflation figures have not altered our view that the [Bank of England's] MPC will probably press ahead and raise interest rates in August".

RBI had said the decision of the Monetary Policy Committee to hike the rate was consistent with the neutral stance and in consonance with the objective of achieving the medium-term target for CPI inflation of 4 per cent within a band of (+/-) 2 per cent, while supporting growth.

De Niro apologizes to Canada for "idiotic behavior" of Trump
The expletive, known as the F-bomb, was bleeped by the CBS network for millions of television watchers at home. After the ceremony, Tory said many Canadians related to De Niro's "strongly held views".

"There's plenty more downside to come", he said.

"The UK (is) close to the bottom of the G7 growth league and close to the top of the inflation league. The combination of Brexit and the Bank's reluctance to raise interest rates is creating a very uncomfortable position for the United Kingdom economy", he said.

The BoE raised rates in November, the first increase since before the 2008 financial crisis. Data also revealed that manufacturing output fell 1.4% in April, the biggest decline for almost six years. However, money markets see the chance of a hike in August at little more than 50 percent.

Global oil prices have been rising due to tensions in the Middle East after US President Donald Trump said America was walking away from the Iran nuclear deal - potentially curbing supplies.

While petrol costs rose sharply, other prices used to calculate CPI, such as electricity bills and food, cooled slightly.

Manufacturers' raw-materials costs were 9.2 percent higher than in May 2017, boosted by the biggest monthly jump - 2.8 percent - since October 2016 and above all forecasts in a Reuters poll.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER