Exceeding expectations, the headline inflation for the month of August rose to 7.55 per cent, compared to 6.87 per cent in July , as prices of potato, wheat and pulses as well as manufactured items soared, which may restrain RBI from cutting interest rates at its monetary policy review next week.
In August last year, however, it was 9.78 per cent.
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Overall, food inflation declined to 9.14 per cent in August, from 10.06 per cent in July. Food articles have 14.3 per cent share in the WPI basket.
In the manufactured items category, prices rose for cotton textiles, paper and paper products, cement and lime.
The rate of price rise in the manufactured products was 6.14 per cent in August, as against 5.58 per cent in July.
In the food articles category, pulses turned expensive by 34.39 per cent in August, wheat by 12.85 per cent and cereals by 10.71 per cent on an annual basis.
Besides, potatoes turned costlier by 68.86 per cent and rice by 10.29 per cent.
Inflation in eggs, meat, fish prices was 13.77 per cent, while in milk and fruits it was was 6.68 per cent and 1.14 per cent respectively.
Vegetables became costlier by 9.98 per cent in August, year-on-year. Inflation in this segment was 24.11 per cent in July.
However, the pressure on prices of onions declined during August to (-) 20.67 per cent.
In non-food articles, inflation in oil seeds was 28.33 per cent, fibres (3.53 per cent) and minerals (9.74 per cent).
Besides, inflation for June was revised upwards to 7.58 per cent, from 7.25 per cent as per provisional estimates.
The Reserve Bank is scheduled to come out with its policy review on Monday in which it is likely to hold policy rates steady as inflation still remains above comfort zone.
The government's move to raise diesel prices by Rs 5 per litre would only stoke inflation further.