Inflation Outlook: Is Another RBI Rate Hike Coming In December? What Investors Should Know

The RBI has raised its FY27 inflation forecast, with headline inflation now expected to average 5.8% over the next three quarters and core inflation revised to 4.4%. Prateek Ancha, Chief Economist, Axis Capital, explains why headline inflation may not fully reflect underlying demand pressures and why current core inflation levels remain manageable. He expects another 25 basis points rate hike in December, followed by an extended pause as the RBI reassesses the inflation trajectory. The discussion also looks at the impact of a weak base from FY26 and why investors should focus on underlying inflation trends rather than headline numbers alone.