Inflation declines to 11.07%

Lower prices of food and non-food items pushed down inflation to 11.07 per cent for the week ended October 11, from 11.44 per cent a week ago. But the government said it was still high, even as the RBI is expected to increase money supply in the system.

Four straight weeks of slow growth in prices may prompt RBI to cut benchmark rates when it reviews the mid-term credit policy on Friday, analysts said.

Inflation measured by movement in the Wholesale Price Index was 3.07 per cent a year ago.

Among food articles, the prices of fruits and vegetables and eggs declined during the week. In the non-food category, sunflower and raw cotton became cheaper.

The index of fuel group too declined marginally by 0.1

per cent on account of lower prices of furnace oil.

The prices of other goods that declined during the week were -- imported edible oil, oil cakes, polyester, staple fibre and ingots of lead and zinc.

Items which became expensive during the week were tea, ghee, maize, rice, masoor, raw tobacco, mustard seed, lubricants, cotton yarn.

Inflation for the week ended August 16 was revised upwards to 12.82 per cent as against the provisional figure of 12.40 per cent.

• Inflation, the silent killer