The retail inflation number in April remained high due to the low base effect, worsened by price jumps across all major commodity groups. The Consumer Price Index (CPI)-based inflation, which the RBI takes as a reference point while deciding on the monetary policy, in April 2022 soared to an eight-year high of 7.79 per cent. It is as compared with 4.23 per cent in April 2021 and 6.97 per cent in March 2022. Core inflation, which excludes changes in food and oil prices, in April also touched a 95-month high at 6.97 per cent. It has remained over 5 per cent for 24 consecutive months. Inflation in the food basket rose to 8.38 per cent in April, from 7.68 per cent in the preceding month and 1.96 per cent in the year-ago month. High price levels of fuel and food items, especially of vegetables, spices and oils/fats, along with household services, contributed to the sharp rise in inflation, a level which is seen as being partly responsible for preempting the unscheduled repo rate hike of 40 basis points by the RBI last week. Among states, the highest inflation rate was recorded by West Bengal, followed by Madhya Pradesh and Telangana. Core inflation — the non-food, non-fuel component of inflation — in April also touched a 95-month high of 6.97 per cent, remaining more than 5 per cent for 24 consecutive months.

Experts say, the base effect may moderate inflation levels in May but it is still expected to remain above 6.5 per cent, raising expectations of a back-to-back rate hike in the June monetary policy meeting of the RBI. Inflation is being seen as posing the “biggest threat” to the economy and the RBI is looking at reversing all measures — liquidity infused and policy rate cuts — taken during the pandemic over the next 1-2 years along with measures to kill demand. India Ratings has been pointing out for a while that inflation in health services is turning structural, as it has remained in excess of 6% for the last 16 months. Education inflation, although low, .