Delhi/Alive News: India’s retail inflation rose to 6.09% in October 2026, its highest level in two years, crossing the Reserve Bank of India’s (RBI) upper limit of 6%. The increase was mainly driven by rising food prices and higher costs of essential goods and services. The latest figures have also raised expectations of an interest rate hike in the RBI’s December 4 monetary policy review.
According to government data, inflation measured by the Consumer Price Index (CPI) increased from 5.54% in September to 6.09% in October. Food inflation also climbed sharply to 8.94% from 7.74% during the same period.
Food prices remained a bigger concern in rural areas, where food inflation reached 9.09%, compared with 8.68% in urban areas.
Inflation increased in both rural and urban regions. Rural inflation rose to 6.63% in October from 6.08% in September, while urban inflation increased to 5.41% from 4.88%.
Prices also increased in several other sectors. Inflation in clothing and footwear rose to 4.96%, while housing inflation reached 2.90%. Restaurant and accommodation services recorded inflation of 10.06%. Health and communication services also became costlier.
RBI may consider another rate hike
Economists believe that rising food prices and wider cost pressures could lead the RBI to increase interest rates by 0.25 percentage points in December. Some experts expect inflation to remain above 6% for several months.
The RBI aims to keep inflation at 4%, with a permitted range of 2% to 6%. If interest rates are increased, borrowing could become more expensive for people with home, car and other floating-rate loans. However, higher deposit rates could benefit bank depositors.
The RBI’s final decision will depend on inflation trends and their impact on economic growth. The next retail inflation figures, for November, are scheduled to be released on December 14.
