India's October inflation jumps to 6.09% as food costs surge 8.94%

India's consumer price index climbed to 6.09% year-on-year in October, according to provisional data, indicating mounting price pressures across the economy. Rural areas saw a higher headline rate at 6.63%, compared with 5.41% in urban regions.

Food inflation stood out sharply, with the Consumer Food Price Index advancing 8.94% annually last month. The increases were widespread geographically, as rural food prices rose 9.09% and urban food inflation reached 8.68%.

The data underscore how much food costs are driving India's overall price pressures, with food inflation far outstripping the headline CPI figure. The October release points to a tough inflation landscape for the Reserve Bank of India. With the acceleration in price growth, markets assign a 69% probability to a 25-basis-point rate increase at the next RBI gathering, and a 31% chance of a larger 50-basis-point move.

The US-Iran conflict has been a key factor behind inflation via higher crude prices, raising India's import bill and pushing up transport, energy and farm production expenses.

As a large oil importer, India is especially exposed to extended disruptions in the Middle East. Rising energy and fertiliser costs gradually filter through to consumer prices, while a weaker rupee adds to the cost of imports.