India's wholesale price inflation rises in January

Will retail inflation be in line with RBI's target

Rising fuel prices and the supermarket "courgette crunch" caused the cost of living to rise at its fastest rate since June 2014 last month, official figures showed today.

U.S. consumer prices in January rose at their fastest pace in almost four years, a fresh sign that a pickup in inflation may be approaching, Labor Department figures showed Wednesday.

The increase in the inflation rate takes it closer to the Bank of England's target rate of 2%, which was last seen in December 2013.

Fuel prices hit a two-year high in early February, according to the RAC.

In January alone, food prices increased by 2.3%, led by a 3.4% jump in pork prices, a staple of the Chinese diet.

In January, the fuel component of CPI rose on rising crude oil prices and a weaker rupee.

Retail inflation eased to 3.17 percent in January, its lowest level in at least five years.

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

"The latest rise in CPI was mainly due to rising petrol and diesel prices, along with a significant slowdown in the fall in food prices", ONS statistician Mike Prestwood said.

An economist from Icra, however said that fuels are unlikely to put extra pressure on retail inflation in the near term.

Vegetable inflation continued to be in the negative territory at (-) 15.62 per cent as against (-) 14.59 per cent a month ago, data released by the Ministry of Statistics and Programme Implementation showed.

"With input prices paid by United Kingdom manufacturers and output prices received by manufacturing businesses on the up, consumer price inflation is likely to rise further over the months ahead".

USA wholesale inflation continued its upward trend in January, recording its largest monthly gain in more than four years, according to data released Tuesday by the Labor Department. However, the price of jute sacking bag (1 per cent) declined. Potato prices recorded sharp fall at (-) 0.20 per cent, from 26.42 per cent in the previous month.

Economists expect commodity prices to push WPI even further and the central bank to keep rates on hold for a while.

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