PPI shows biggest gain in wholesale inflation since 2012

According to the Wholesale Price Index (WPI) data released by the Commerce and Industry Ministry, the annual inflation rate was (-) 1.07 per cent in January, 2016.

United Kingdom inflation is creeping ever closer to the Bank of England's (BoE) 2 per cent target reaching a 30-month high of 1.8 per cent in January.

The Institute for Supply Management's prices index, which is closely correlated to the PPI, surged in January to its highest level since May 2011, largely reflecting increases in the prices of commodities such as crude oil.

Inflation is widely expected to pick up this year as a result of the weaker pound, which is making imported goods more expensive.

Much of the rise in consumer prices was due to high food and transportation prices.

Auto sales, however, saw their sharpest decline in eight months, falling 1.4 percent.

Last week RBI had decided not to cut interest rates on fear that inflation will rise in coming days.

CPIH, which the ONS will adopt as its preferred measure of inflation in March, rose by 2.0% in the year to January 2017, compared with a 1.7% rise in the year to December 2016.

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Downward pressure on CPI came from a drop in the price of clothing and footwear, which edged down by 4.2 per cent between December and January in contrast to a smaller fall of 3.1 per cent the year before.

"We still believe that domestic price pressures remain strong and supportive of core CPI, which is evident in solid core services inflation, in particular the shelter component".

"By the end of this year, inflation is likely to be around 3 per cent and possibly even higher".

In pulses and products category also, the rate of price rise was negative at (-) 6.62 per cent.

Data on Monday showed India's retail inflation cooled to 3.17 percent last month, its lowest in at least five years.

"It is obvious that consumer prices have gained momentum in recent months", he said.

Consumer inflation has surged 2.5% in January compared to a year before, which is maximum since May 2014 and a little above the market expectations.

The 0.6% gain in the producer-price index followed a 0.2% advance the prior month, a Labor Department report showed Tuesday.

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