Economy

India's factory output rises, so does inflation

India's factory output rises, so does inflation”

According to CPI data published by the Office for National Statistics (ONS) the UK's inflation rate leapt from 2.6 per cent to 2.9 per cent last month, outpacing expectations it would only reach 2.8 per cent and reaching its highest rate since May.

Consumption-driven demand and seasonal factors pushed India's factory output higher - but retail inflation also rose along with, official data showed on Tuesday.

The rise in inflation was led by a spike in food prices, as on sequential basis, the country's Consumer Food Price Index (CFPI) rose to 1.52 per cent during August when compared to the previous month.

On a monthly basis, consumer prices grew 0.6% in August, just above the 0.5% gain expected by economists.

The index of industrial production (IIP) growth was 4.5 percent in July 2016.

India's economic growth unexpectedly slowed to 5.7% in the June quarter, the slowest pace in three years, underlining the disruption caused by the uncertainty related to the rollout of the goods and services tax (GST) even as the Indian economy is struggling to recover from a shock demonetisation.

Separate data from the CSO showed that industrial production grew 1.2 percent year-on-year in July, which was slightly slower than the 1.6 percent growth economists had predicted.

Inflation rose in both Britain and the EU overall, with increasing global commodity prices thought to be partly responsible, although the United Kingdom rate is higher than in all the larger western European nations.

Meanwhile the U.S. dollar may slip later this afternoon with the release of the latest JOLTs job data, with an expected dip in job openings in July likely to weigh on market sentiment.

"It is also interesting to note that the Retail Prices Index (RPI) 12-month rate in August 2017 was 3.9% - good news for members of occupational schemes with RPI "hard-wired" into their scheme rules and those people with annuities providing RPI-based increases", he added.

However, items such as cereals and products, meat and fish, oils and fats became cheaper at inflation prints at 3.87 per cent, 2.94 per cent and 1.03 per cent, respectively.

But the August inflation figure remains below RBI's medium term target of 4 per cent.



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