Food inflation moves to double digit levels

New Delhi, Sep 2: Inflation soared up as food inflation went up to double digit. Meanwhile, fuel and power inflation was at 12.55 per cent for the week ended August 20, down from 13.13 per cent in the previous week.

Economist are of the view that the resurgence in food inflation will force the government and the Reserve Bank to increase interest rate or take some action.

Meanwhile, headline inflation, which includes manufactured items, fuels and non-food primary items, was at 9.22 per cent in June.

The Reserve Bank has already hiked policy rates 11 times since March 2010 to tame demand and curb the rate of inflation. The RBI and the Prime Minister's Economic Advisory Council had projected headline inflation to remain high at around 9 per cent till October.

Food inflation was in double digits for most of 2010, but started to moderate from March this year.

In its Economic Outlook for 2011-12 released last month, the PMEAC said that while pressure from food inflation has fallen in recent months, the rate of price rice still remains quite high, with the possibility of a further surge in coming months.

PTI