3 min readSep 16, 2026 06:00 AM IST First published on: Sep 16, 2026 at 06:00 AM ISTRetail inflation, as measured by the consumer price index, edged up to 4.8 per cent in August from 4.45 per cent in July, as per the latest data from the National Statistics Office. Price pressures are being felt across food and non-food categories. The disaggregated data shows that inflation in the food segment rose to 5.95 per cent, driven in part by items such as onion, ginger, and garlic. Core inflation, which excludes volatile food and fuel prices, has also risen. Inflation was elevated in the personal care and miscellaneous goods and services segment. Higher food and fuel costs seem to have pushed up prices in the hospitality sector. Wholesale inflation rose to 9.92 per cent in August, up from 9.78 per cent in July. All this seems to suggest that price pressures are getting broad-based. As per a study by economists at SBI, “data till August indicates that the process of inflation getting generalised has started”.There is uncertainty over food prices. Crisil’s Deficient Rainfall Impact Parameter (DRIP) suggests “elevated vulnerability in cotton, bajra, maize, tur, groundnut and soybean.” Global energy prices have also surged following the escalation in the West Asia crisis after the Houthi strikes on Saudi Arabia. Brent crude oil is currently hovering around $106 per barrel. The price of the Indian crude oil basket has surged to $128.7 per barrel as on September 14, up from $90.2 in August, as per the Petroleum Planning and Analysis Cell. Higher fuel prices will spill over, even if partially, into the broader economy. Inflation is expected to continue to edge up. The RBI has projected CPI at 5.9 per cent in the year’s third quarter. Ratings agency ICRA expects inflation to harden to around 6 per cent during October-November, while SBI economists believe that inflation could cross the 6.5 per cent mark, breaching the upper threshold of the central bank’s inflation targeting framework.AdvertisementIn August, the Monetary Policy Committee had kept a status quo, keeping the repo rate at 5.25 per cent and the stance at neutral. However, given its expectations — it has projected inflation at 5.7 per cent in the year’s second half and 5.3 per cent in the next financial year’s first quarter — real interest rates are mildly negative on a forward basis. With resilient growth, broad-based price pressures strengthen the case for a rate hike, even as the RBI works to withdraw excess liquidity from the system.