India's March retail inflation rises, February IIP falls

Reuters

China's producer price index (PPI) rose 7.6 percent in March from a year earlier, still elevated but in line with expectations and easing from 7.8 percent in February, a 9-year high, the National Bureau of Statistics said on Wednesday.

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said: "March's CPI inflation rate comfortably exceeds the 2.1% anticipated by the MPC in February's Inflation Report, largely due to higher core goods prices.

Sterling crept up by around 0.14 per cent against the euro to 1.1731 following the news, and also lifted to 1.2432 against the United States dollar.

The Retail Price Index (RPI), a separate measure of inflation which includes council tax and mortgage interest payments, fell to 3.1 per cent in March, down from 3.2 per cent in February. It has accelerated in recent months, pushed up in part by a weakening of the pound since last year's decision to leave the EU.

Food inflation was 7.3 percent in March compared with 7.1 percent in February, while non-food inflation was 15.6 percent last month compared with 16.4 percent the month before, deputy government statistician Baah Wadieh told a news conference.

On a month-over-month basis, CPI fell 0.3% in March from a month earlier.

China's consumer inflation grew mildly in March, as stable prices reinforced the view that the world's second largest economy is firming up.




According to the Reuters poll, India's inflation was seen climbing and touching distance of the Reserve Bank of India's (RBI) 4% medium-term target in March, driven by higher food costs. Slowdown in consumer spendingAndrew Sentance, senior economic adviser at professional services firm PwC, said, "With inflation expected to pick up further over the course of this year, this squeeze on consumer purchasing power is likely to intensify".

Compared to same period of 2016 air fare inflation dived 22.8%, reflecting an Easter weekend price spike which falls in April this year.

With inflation expected to reach 3.0% by the end of the year, some UK-focused companies may struggle as consumers become more cautious about spending.

The BOE says the jobless rate can fall as low as 4.5 percent without fueling inflation.

Wage growth has slipped below the rate of inflation, a development that threatens damage to living standards and the wider economy through an erosion of household spending power. Prices of housing water, electricity, gas and other fuels rose by 2.5 per cent, while cost of transport inched up 8.9 per cent. "At the same time, low pay growth may also be a sign that employers are seeking to offset the impact of increasing labour costs, such as last week's Apprenticeship Levy and the latest National Living Wage increase".

But we don't think that that will panic the Monetary Policy Committee (MPC) into raising rates imminently.

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