The Bank of Japan's (BOJ) monetary policy may change as a result of Japanese consumer inflation exceeding expectations. The national core consumer price index (CPI), excluding unstable fresh food prices, increased 3.1 per cent in August, matching the rate from the previous month and above the prediction of 3 per cent, according to statistics from the Statistics Bureau cited by the financial news website Investing.com.

The national CPI inflation grew by 3.2 per cent in August when fresh food costs were taken into account, which indicated a small decline from July's 3.3 per cent increase. The monthly growth rate also dropped, going from 0.5 per cent in July to 0.3 per cent in August.

An important core measurement, which excludes the cost of fuel and fresh food, was nevertheless strong in August at 4.3 per cent, a 40-year high. Consumer spending on food and other items continued to outweigh government subsidies for fuel and power, maintaining this inflationary tendency. This core figure, which the BOJ constantly monitors in order to assess Japan's underlying inflation, has been steadily increasing this year despite a drop in the overall inflation.

Since the BOJ's 2 per cent annual objective for headline CPI inflation has not been met for 17 months straight, there have been debates about possible modifications to the current policy of ultra-low interest rates. Indicating a change, BOJ Governor Kazuo Ueda cited significant support over seven years as well as indications of stable wage growth and inflation. Ueda's remarks have increased discussions about the possibility of discontinuing negative interest rates, even if the bank is anticipated to keep its neutral position.

As a result of a recent rise in oil prices, Japan's inflation rate has risen sharply, displaying trends similar to other developing economies. Prime Minister Fumio Kishida is under political pressure due to rising inflation and other economic difficulties, since his popularity has declined ever since he took to office in October 2021. In reaction to price hikes, Kishida promised a "drastic" economic package while keeping key economic team members.

Due to differences in local and American interest rates, the yen is losing value and is currently trading at 10-month lows against the dollar. This has caused Japan's inflation. Japanese consumers now pay more for imports, particularly food and energy, as a result of the yen's weakening.

Analysts forecast that the BOJ would keep its current straightforward monetary policy after its policy meeting. Now the focus is on Governor Ueda's long-term goals for the central bank. Following his assertion that there might be enough information available by year's end to decide whether to continue the programme, several BOJ observers have revised their projections for increased rates, with half now calling for an increase in the first half of 2024.

The Japanese economy is still weak, according to Tom Kenny, a senior international economist at ANZ Research, who was quoted in a Moneycontrol report. He suggested that current monetary policies may need to be maintained because the demand might not be able to support persistent price pressures. Despite rumours, many analysts are sceptical to forecast that the BOJ's negative rate policy will stop immediately by year's end.

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The Bank of Japan's (BOJ) monetary policy may change as a result of Japanese consumer inflation exceeding expectations. The national core consumer price index (CPI), excluding unstable fresh food prices, increased 3.

The Bank of Japan's (BOJ) monetary policy may change as a result of Japanese consumer inflation exceeding expectations. The national core consumer price index (CPI), excluding unstable fresh food prices, increased 3.1 per cent in August, matching the rate from the previous month and above the prediction of 3 per cent, according to statistics from the Statistics Bureau cited by the financial news website Investing.com. The national CPI inflation grew by 3.2 per cent in August when fresh food costs were taken into account, which indicated a small decline from July's 3.3 per cent increase. The monthly growth rate also dropped, going from 0.5 per cent in July to 0.3 per cent in August. An important core measurement, which excludes the cost of fuel and fresh food, was nevertheless strong in August at 4.3 per cent, a 40-year high. Consumer spending on food and other items continued to outweigh government subsidies for fuel and power, maintaining this inflationary tendency. This core figure, which the BOJ constantly monitors in order to assess Japan's underlying inflation, has been steadily increasing this year despite a drop in the overall inflation. Since the BOJ's 2 per cent annual objective for headline CPI inflation has not been met for 17 months straight, there have been debates about possible modifications to the current policy of ultra-low interest rates. Indicating a change, BOJ Governor Kazuo Ueda cited significant support over seven years as well as indications of stable wage growth and inflation. Ueda's remarks have increased discussions about the possibility of discontinuing negative interest rates, even if the bank is anticipated to keep its neutral position. As a result of a recent rise in oil prices, Japan's inflation rate has risen sharply, displaying trends similar to other developing economies. Prime Minister Fumio Kishida is under political pressure due to rising inflation and other economic difficulties, since his popularity has declined ever since he took to office in October 2021. In reaction to price hikes, Kishida promised a "drastic" economic package while keeping key economic team members. Due to differences in local and American interest rates, the yen is losing value and is currently trading at 10-month lows against the dollar. This has caused Japan's inflation. Japanese consumers now pay more for imports, particularly food and energy, as a result of the yen's weakening. Analysts forecast that the BOJ would keep its current straightforward monetary policy after its policy meeting. Now the focus is on Governor Ueda's long-term goals for the central bank. Following his assertion that there might be enough information available by year's end to decide whether to continue the programme, several BOJ observers have revised their projections for increased rates, with half now calling for an increase in the first half of 2024. The Japanese economy is still weak, according to Tom Kenny, a senior international economist at ANZ Research, who was quoted in a Moneycontrol report. He suggested that current monetary policies may need to be maintained because the demand might not be able to support persistent price pressures. Despite rumours, many analysts are sceptical to forecast that the BOJ's negative rate policy will stop immediately by year's end. WATCH WION LIVE HERE

Japanese consumer inflation surpasses expectations, fuelling speculation on BOJ's next move

Based on government data released on Wednesday, consumer inflation in the United States rose in August for a second consecutive month, increasing pressure on policymakers to lower prices.&nbsp;

According to the Labour Department, the consumer price index (CPI), a crucial inflation indicator, increased by 3.7 per cent from a year ago, accelerating from&nbsp;3.2 per cent in&nbsp;July. However, a measurement that removed volatile parts cooled.

The Federal Reserve has rapidly increased the benchmark lending rate since March of last year in an effort to reduce demand and stably cut inflation, but the present level is persistently higher than the two percent stated target.

&nbsp;“The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase,” AFP quoted the Labor Department as saying.

The government also noted that the rent-adjusted shelter index continues to rise for the 40th straight month.

The CPI increased by 0.6 per cent from July to August, speeding up from the previous month as well.

While the most recent report may cause the Fed to pause for a while, economists believe it is unlikely to result in additional rate increases.

Ernest and Young chief economist Gregory Daco told AFP that should the “core” readings weaken consistently, “that will be taken as a sign by the Fed that perhaps further tightening is not necessary.”

“The paradigm for Fed policymakers has shifted away from tighten at all costs to tighten only as certain conditions are being met,” Daco stated.

Included in these circumstances are whether or not domestic demand is stronger than anticipated and whether the labour market is still active than anticipated.

According to Oxford Economics analyst Nancy Vanden Houten, the Fed will likely place more emphasis on underlying inflation when determining its monetary policy.

“We think they’re going to be quite cautious about lowering rates,” AFP quoted her. as saying

“We think that they’re done raising interest rates. We think the risk remains for more rate increases, but we certainly don't expect one next week,” she said.

The central bank has increased interest rates to their highest level in 22 years. The Federal Reserve's next action will be to lower interest rates, but Vanden Houten predicted that won’t happen until the middle of next year.

(With inputs from agencies)&nbsp;

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Based on government data released on Wednesday, consumer inflation in the United States rose in August for a second consecutive month, increasing pressure on policymakers to lower prices.

Based on government data released on Wednesday, consumer inflation in the United States rose in August for a second consecutive month, increasing pressure on policymakers to lower prices. According to the Labour Department, the consumer price index (CPI), a crucial inflation indicator, increased by 3.7 per cent from a year ago, accelerating from 3.2 per cent in July. However, a measurement that removed volatile parts cooled. The Federal Reserve has rapidly increased the benchmark lending rate since March of last year in an effort to reduce demand and stably cut inflation, but the present level is persistently higher than the two percent stated target. “The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase,” AFP quoted the Labor Department as saying. The government also noted that the rent-adjusted shelter index continues to rise for the 40th straight month. The CPI increased by 0.6 per cent from July to August, speeding up from the previous month as well. While the most recent report may cause the Fed to pause for a while, economists believe it is unlikely to result in additional rate increases. Ernest and Young chief economist Gregory Daco told AFP that should the “core” readings weaken consistently, “that will be taken as a sign by the Fed that perhaps further tightening is not necessary.” “The paradigm for Fed policymakers has shifted away from tighten at all costs to tighten only as certain conditions are being met,” Daco stated. Included in these circumstances are whether or not domestic demand is stronger than anticipated and whether the labour market is still active than anticipated. According to Oxford Economics analyst Nancy Vanden Houten, the Fed will likely place more emphasis on underlying inflation when determining its monetary policy. “We think they’re going to be quite cautious about lowering rates,” AFP quoted her. as saying “We think that they’re done raising interest rates. We think the risk remains for more rate increases, but we certainly don't expect one next week,” she said. The central bank has increased interest rates to their highest level in 22 years. The Federal Reserve's next action will be to lower interest rates, but Vanden Houten predicted that won’t happen until the middle of next year. (With inputs from agencies) WATCH WION LIVE HERE

US consumer inflation rises to 3.7 per cent in August: Report 

Previously shadowed by strikingly high inflation rates; Turkey has seen the steepest drop in its inflation rates in the last 28 years. Trade deficit widens by 138.4% from last year.

World Business Watch: Turkey's consumer inflation at its lowest in 28 years

Japan's core consumer inflation quickened to 2.8% in August to hit the fastest annual pace in nearly eight years. This is as price pressure from raw materials and yen weakness broadened.

World Business Watch: Japan's August consumer inflation hits near 8-year high

Putting pressure on policymakers ahead of the last monetary policy meeting of the year South Korea's consumer inflation accelerated to a near 10-year peak in October on higher costs of oil products, housing rentals and outdoor dining.

South Korea inflation hits near decade-high, raising rate hike bets

South Korea's consumer inflation has accelerated to a more than nine-year high in May, reinforcing calls for gradual monetary tightening, though the increase was mainly due to a low base effect and rises in oil and agricultural prices.

World Business Watch: South Korea’s inflation hits 9-year high as commodity prices jump

Inflation rose to 12.7 per cent year-on-year, the highest level in nine years mainly driven by an increase in prices of food items, the Pakistan Bureau of Statistics (PBS) said in a report.

<a href="https://www.wionews.com/pakistan">Inflation</a>, measured by the Consumer Price Index (CPI), edged up by 1.3 per cent over the previous month after the PBS revised its calculation methodology by setting the new base year 2015-16 instead of the previous 2007-08 financial year, Dawn reported.

In a statement, the Finance Ministry claimed that inflation would come down from the next month, however, without divulging further details on how they figured this out.

The data released on Wednesday showed that higher prices of food items have been the largest driver in overall inflation in November.

It has also been observed that the prices of essential food items are higher in rural areas than in urban areas, the report said.

Food inflation in urban areas rose by 16.6 per cent in November on a yearly basis and 2.4 per cent on a monthly basis and that in rural areas by 19.3 per cent and 3.4 per cent, respectively.

Similarly, non-food inflation in urban centres was recorded at 9.6 per cent year-on-year, while it was 9 per cent in rural areas.

The rise in non-food inflation is mainly driven by an increase in oil prices over the past few months and a combined impact of the depreciation of the exchange rate.

Economist Ashfaque Hasan Khan, however, believes that inflation is likely to be "more than 13 per cent in December, and the expected increase in inflation numbers would be based on a hike in energy prices, currency devaluation and high-interest rates."

"Higher prices of imported items and raw materials due to the currency devaluation are being passed on to consumers. Companies are also passing on the higher costs of working capital amid increased interest rates to the consumers," Khan was quoted as saying by Geo News.

The central bank kept its benchmark interest rate unchanged at 13.25 per cent in November, as expected, to prevent food inflation, nearing the top of its target range, from further spreading.

State Bank of Pakistan Governor Reza Baqir was recently quoted as saying that rising inflation "has partly been the result of the need to restore competitiveness in the exchange rate, increased administered prices to reduce fiscal deficits in the public sector, and unforeseen food supply disruptions."

Inflation rose to 12.7 per cent year-on-year, the highest level in nine years mainly driven by an increase in prices of food items, the Pakistan Bureau of Statistics (PBS) said in a report.

Inflation rose to 12.7 per cent year-on-year, the highest level in nine years mainly driven by an increase in prices of food items, the Pakistan Bureau of Statistics (PBS) said in a report. Inflation, measured by the Consumer Price Index (CPI), edged up by 1.3 per cent over the previous month after the PBS revised its calculation methodology by setting the new base year 2015-16 instead of the previous 2007-08 financial year, Dawn reported. In a statement, the Finance Ministry claimed that inflation would come down from the next month, however, without divulging further details on how they figured this out. The data released on Wednesday showed that higher prices of food items have been the largest driver in overall inflation in November. It has also been observed that the prices of essential food items are higher in rural areas than in urban areas, the report said. Food inflation in urban areas rose by 16.6 per cent in November on a yearly basis and 2.4 per cent on a monthly basis and that in rural areas by 19.3 per cent and 3.4 per cent, respectively. Similarly, non-food inflation in urban centres was recorded at 9.6 per cent year-on-year, while it was 9 per cent in rural areas. The rise in non-food inflation is mainly driven by an increase in oil prices over the past few months and a combined impact of the depreciation of the exchange rate. Economist Ashfaque Hasan Khan, however, believes that inflation is likely to be "more than 13 per cent in December, and the expected increase in inflation numbers would be based on a hike in energy prices, currency devaluation and high-interest rates." "Higher prices of imported items and raw materials due to the currency devaluation are being passed on to consumers. Companies are also passing on the higher costs of working capital amid increased interest rates to the consumers," Khan was quoted as saying by Geo News. The central bank kept its benchmark interest rate unchanged at 13.25 per cent in November, as expected, to prevent food inflation, nearing the top of its target range, from further spreading. State Bank of Pakistan Governor Reza Baqir was recently quoted as saying that rising inflation "has partly been the result of the need to restore competitiveness in the exchange rate, increased administered prices to reduce fiscal deficits in the public sector, and unforeseen food supply disruptions."

Consumer inflation hits 9-year-high in Pakistan

<a href="http://www.wionews.com/india-news/country-built-on-love-harmony-brotherhood-priyanka-gandhi-at-her-first-rally-202902">Country</a><a href="http://www.wionews.com/india-news/country-built-on-love-harmony-brotherhood-priyanka-gandhi-at-her-first-rally-202902"> built on love, harmony &amp; brotherhood: Priyanka Gandhi at her first rally&nbsp;</a>

Priyanka Gandhi Vadra, who was recently made Congress general secretary of eastern Uttar Pradesh, addressed her first rally today in Gujarat's Gandhinagar where she said "this country is made on the foundations of love, harmony and brotherhood." She added that "today, whatever is happening in the country is very sad."&nbsp;

The rally is being seen as the Congress kicking off its campaign for the general elections which will be held from April 11 to May 19. The results will be declared on May 23.&nbsp;

 
<a href="http://www.wionews.com/india-news/lok-sabha-polls-i-reiterate-bsp-will-not-have-any-alliance-with-congress-says-mayawati-202862">Lok Sabha polls: No 'grand alliance' in Uttar Pradesh as Mayawati rules out </a><a href="http://www.wionews.com/india-news/lok-sabha-polls-i-reiterate-bsp-will-not-have-any-alliance-with-congress-says-mayawati-202862">tie-up</a><a href="http://www.wionews.com/india-news/lok-sabha-polls-i-reiterate-bsp-will-not-have-any-alliance-with-congress-says-mayawati-202862"> with Congress in any state</a>

Bahujan Samaj Party (BSP) chief Mayawati on Tuesday reiterated that her party will "not have any alliance with Congress party in any state". Her remarks came just a couple of days after the Election Commission of India announced dates for the Lok Sabha polls next month.&nbsp; 
&nbsp;&nbsp; 
"It has been reiterated once again that Bahujan Samaj Party (BSP) will not have any alliance with Congress party in any state, to contest the upcoming elections," Mayawati said.&nbsp;

 
<a href="http://www.wionews.com/world/trump-should-not-be-impeached-unless-reasons-are-overwhelming-house-speaker-nancy-pelosi-202904">Trump should not be impeached unless reasons are 'overwhelming': Nancy Pelosi</a>

US President Donald Trump should not be impeached unless the reasons are overwhelming and bipartisan, given how divisive it would be for the country, House Speaker Nancy Pelosi said in a Washington Post interview published on Monday.

"I’m not for impeachment," Pelosi, the top US Democrat, said in the interview, which was conducted last week.

 
<a href="http://www.wionews.com/business-economy/consumer-inflation-rises-to-257-in-february-government-data-202903">Retail inflation up to 2.57% in February: Government data</a>

Consumer inflation in the month of February rose to 2.57 per cent, government data revealed on Tuesday. Consumer inflation was revised to 1.97 per cent in January this year from 2.05 per cent.&nbsp;

 
<a href="http://www.wionews.com/india-news/the-new-york-times-faces-backlash-for-missplelling-pm-modis-name-calling-pulwama-terror-attack-an-explosion-202885">New York Times faces backlash for calling Pulwama terror attack an 'explosion', misspelling PM Modi's name</a>

The New York Times, a leading American daily, raked controversy on Monday after it referred to Pulwama terror attack as an "explosion". Twitterati didn't spare a second to troll the US media giant with some even asking if the 9/11 terror attack was an airplane crash if Pulwama bombing was an "explosion".&nbsp;

The "explosion" bit wasn't the only folly exhibited in the NYT tweet. Its post on a story on the upcoming Lok Sabha polls had the Prime Minister's name spelt wrongly as "Narandra Modi".&nbsp;

Country built on love, harmony & brotherhood: Priyanka Gandhi at her first rally Priyanka Gandhi Vadra, who was recently made Congress general secretary of eastern Uttar Pradesh, addressed her first rally today in Gujarat's Gandhinagar where she said "this country is made on the foundations of love, harmony and brotherhood.

Country built on love, harmony & brotherhood: Priyanka Gandhi at her first rally Priyanka Gandhi Vadra, who was recently made Congress general secretary of eastern Uttar Pradesh, addressed her first rally today in Gujarat's Gandhinagar where she said "this country is made on the foundations of love, harmony and brotherhood." She added that "today, whatever is happening in the country is very sad." The rally is being seen as the Congress kicking off its campaign for the general elections which will be held from April 11 to May 19. The results will be declared on May 23. Lok Sabha polls: No 'grand alliance' in Uttar Pradesh as Mayawati rules out tie-up with Congress in any state Bahujan Samaj Party (BSP) chief Mayawati on Tuesday reiterated that her party will "not have any alliance with Congress party in any state". Her remarks came just a couple of days after the Election Commission of India announced dates for the Lok Sabha polls next month. "It has been reiterated once again that Bahujan Samaj Party (BSP) will not have any alliance with Congress party in any state, to contest the upcoming elections," Mayawati said. Trump should not be impeached unless reasons are 'overwhelming': Nancy Pelosi US President Donald Trump should not be impeached unless the reasons are overwhelming and bipartisan, given how divisive it would be for the country, House Speaker Nancy Pelosi said in a Washington Post interview published on Monday. "I’m not for impeachment," Pelosi, the top US Democrat, said in the interview, which was conducted last week. Retail inflation up to 2.57% in February: Government data Consumer inflation in the month of February rose to 2.57 per cent, government data revealed on Tuesday. Consumer inflation was revised to 1.97 per cent in January this year from 2.05 per cent. New York Times faces backlash for calling Pulwama terror attack an 'explosion', misspelling PM Modi's name The New York Times, a leading American daily, raked controversy on Monday after it referred to Pulwama terror attack as an "explosion". Twitterati didn't spare a second to troll the US media giant with some even asking if the 9/11 terror attack was an airplane crash if Pulwama bombing was an "explosion". The "explosion" bit wasn't the only folly exhibited in the NYT tweet. Its post on a story on the upcoming Lok Sabha polls had the Prime Minister's name spelt wrongly as "Narandra Modi".

News brief: Big stories of the day

<a href="http://www.wionews.com/business-economy/december-retail-inflation-rate-drops-to-219-lowest-since-june-2017-190234">Consumer inflation</a> in the month of February rose to 2.57 per cent, government data revealed on Tuesday. Consumer inflation was revised to 1.97 per cent in January this year from 2.05 per cent.&nbsp;

In a surprise move on February 7, the Reserve Bank of India's Monetary Policy Committee (MPC) cut the benchmark repo rate 25 basis points to 6.25 per cent, in its first cut in 18 months.

The MPC, which mainly monitors retail inflation data, also revised down its inflation projections for the period from April to September to 3.2 per cent to 3.4 per cent, from 3.8 per cent to 4.2 per cent.

Inflation pressures have eased in recent months, following falls in food and crude oil prices. India imports nearly 80 per cent of oil it consumes.

Meanwhile,&nbsp;India's industrial output in January rose 1.7 per cent from a year earlier, lower than forecast, government data showed on Tuesday.

January's growth was much slower than the upwardly revised 2.6 per cent year-on-year increase in December, the data showed.

(With inputs from Reuters)

Consumer inflation in the month of February rose to 2.57 per cent, government data revealed on Tuesday. Consumer inflation was revised to 1.97 per cent in January this year from 2.

Consumer inflation in the month of February rose to 2.57 per cent, government data revealed on Tuesday. Consumer inflation was revised to 1.97 per cent in January this year from 2.05 per cent. In a surprise move on February 7, the Reserve Bank of India's Monetary Policy Committee (MPC) cut the benchmark repo rate 25 basis points to 6.25 per cent, in its first cut in 18 months. The MPC, which mainly monitors retail inflation data, also revised down its inflation projections for the period from April to September to 3.2 per cent to 3.4 per cent, from 3.8 per cent to 4.2 per cent. Inflation pressures have eased in recent months, following falls in food and crude oil prices. India imports nearly 80 per cent of oil it consumes. Meanwhile, India's industrial output in January rose 1.7 per cent from a year earlier, lower than forecast, government data showed on Tuesday. January's growth was much slower than the upwardly revised 2.6 per cent year-on-year increase in December, the data showed. (With inputs from Reuters)

Retail inflation up to 2.57% in February: Government data

The continued decline in food prices pulled down retail inflation to an 18-month low of 2.19 per cent in December 2018, creating headroom for the RBI to cut interest rate in its monetary policy review next month.

Another set of official data showed that the wholesale inflation too eased to an eight-month low of 3.80 per cent in December on softening fuel and food prices.

The inflation based on the Consumer Price Index (CPI) was 2.33 per cent in November and 5.21 per cent in December 2017.

According to the data released by the Ministry of Statistics and Programme Implementation, food inflation remained in the negative zone at 2.51 per cent compared to (-) 2.61 per cent in November.

The rate of price rise in vegetables, fruits and protein-rich eggs continued to decline.

However, there was a marginal increase in the prices of meat, fish, and pulses.

Fuel and light inflation was 4.54 per cent in December, down from 7.39 per cent in November on back of reduction in prices of petrol and diesel.&nbsp;

The Reserve Bank of India, which mainly factors in retail inflation, has been tasked by the government to maintain the inflation near 4 per cent.

The central bank, under new Governor Shaktikanta Das, is scheduled to announce the next set its bi-monthly monetary policy on February 7 and industry expects that it will cut the key lending rate.

Commenting on the data, industry chamber CII said the decline in the inflation reading, which is well within the central bank's medium-term inflation target, should induce the RBI to resume the accommodative policy stance to trigger the investment cycle and support growth by lowering the borrowing costs of industry.

The factory output based on movement in Index of Industrial Production (IIP) slumped to a 17-month low of 0.5 per cent in November on account of contraction in the manufacturing sector, particularly consumer and capital goods.

Another industry body Assocham also made a case for easing of policy stance by the RBI.

In its December monetary policy review, the RBI had kept interest rates unchanged but held out a promise to cut them if the upside risks to the inflation do not materialise.

Having raised rates twice this year, the central bank had retained its 'calibrated tightening' policy stance.

Shubhada Rao, Chief Economist, Yes Bank expects that going forward the inflation is expected to be closer to 3.5- 3.7 per cent band.

"This paves way for the MPC to not just change its stance to neutral but also mull over a possible rate cut. The inflation trajectory looks below 4 per cent over the next quarter," he said.

Wholesale inflation continued to decline for the second consecutive month in December due to cheaper fuel and vegetables. The Wholesale Price Index-based inflation was 4.64 per cent in November 2018 and 5.54 per cent in October.&nbsp;

In December 2017, WPI inflation stood at 3.58 per cent.

Deflation in food articles stood at 0.07 per cent in December, against 3.31 per cent in November. Vegetables continued the deflationary trend for six months and prices declined 17.55 per cent in December, compared to 26.98 per cent contraction in the previous month.

Inflation in the 'fuel and power' basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent in November. This was on account of lowering of prices of petrol and diesel through December.

"The continuing deceleration in the growth of WPI and softening of global fuel prices provide ample opportunity to MPC (monetary policy committee) to cut down policy rate at earliest which will kick start investment and revival in overall industrial growth," Assocham said.

The continued decline in food prices pulled down retail inflation to an 18-month low of 2.19 per cent in December 2018, creating headroom for the RBI to cut interest rate in its monetary policy review next month.

The continued decline in food prices pulled down retail inflation to an 18-month low of 2.19 per cent in December 2018, creating headroom for the RBI to cut interest rate in its monetary policy review next month. Another set of official data showed that the wholesale inflation too eased to an eight-month low of 3.80 per cent in December on softening fuel and food prices. The inflation based on the Consumer Price Index (CPI) was 2.33 per cent in November and 5.21 per cent in December 2017. According to the data released by the Ministry of Statistics and Programme Implementation, food inflation remained in the negative zone at 2.51 per cent compared to (-) 2.61 per cent in November. The rate of price rise in vegetables, fruits and protein-rich eggs continued to decline. However, there was a marginal increase in the prices of meat, fish, and pulses. Fuel and light inflation was 4.54 per cent in December, down from 7.39 per cent in November on back of reduction in prices of petrol and diesel. The Reserve Bank of India, which mainly factors in retail inflation, has been tasked by the government to maintain the inflation near 4 per cent. The central bank, under new Governor Shaktikanta Das, is scheduled to announce the next set its bi-monthly monetary policy on February 7 and industry expects that it will cut the key lending rate. Commenting on the data, industry chamber CII said the decline in the inflation reading, which is well within the central bank's medium-term inflation target, should induce the RBI to resume the accommodative policy stance to trigger the investment cycle and support growth by lowering the borrowing costs of industry. The factory output based on movement in Index of Industrial Production (IIP) slumped to a 17-month low of 0.5 per cent in November on account of contraction in the manufacturing sector, particularly consumer and capital goods. Another industry body Assocham also made a case for easing of policy stance by the RBI. In its December monetary policy review, the RBI had kept interest rates unchanged but held out a promise to cut them if the upside risks to the inflation do not materialise. Having raised rates twice this year, the central bank had retained its 'calibrated tightening' policy stance. Shubhada Rao, Chief Economist, Yes Bank expects that going forward the inflation is expected to be closer to 3.5- 3.7 per cent band. "This paves way for the MPC to not just change its stance to neutral but also mull over a possible rate cut. The inflation trajectory looks below 4 per cent over the next quarter," he said. Wholesale inflation continued to decline for the second consecutive month in December due to cheaper fuel and vegetables. The Wholesale Price Index-based inflation was 4.64 per cent in November 2018 and 5.54 per cent in October. In December 2017, WPI inflation stood at 3.58 per cent. Deflation in food articles stood at 0.07 per cent in December, against 3.31 per cent in November. Vegetables continued the deflationary trend for six months and prices declined 17.55 per cent in December, compared to 26.98 per cent contraction in the previous month. Inflation in the 'fuel and power' basket in December slumped to 8.38 per cent, nearly half of 16.28 per cent in November. This was on account of lowering of prices of petrol and diesel through December. "The continuing deceleration in the growth of WPI and softening of global fuel prices provide ample opportunity to MPC (monetary policy committee) to cut down policy rate at earliest which will kick start investment and revival in overall industrial growth," Assocham said.

Retail inflation drops to 2.19% in December, lowest since June 2017

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