A mid the rising food prices squeezing household budgets, retail inflation soared to 7.4 per cent in July, breaching the Reserve Bank of India (RBI)’s upper tolerance limit of 6 per cent. This was the highest inflation figure—measured in terms of the Consumer Price Index (CPI)—in the past 15 months, and significantly above the 4.8 per cent recorded in June. The previous high—at 7.8 per cent—was registered back in April 2022.
The latest inflation data notbelies the RBI’s hopes of cutting the interest rates anytime soon. Instead, it raises the spectre of the central bank increasing the interest rates should inflation hover above the 7 per cent mark for another month.
