CPI inched up to 3.86 percent year-on-year, highest in FY18 so far. But these are early days. The average inflation in FY18 so far sits at pretty manageable 3.4 percent. Onions and tomatoes sent the CPI ballooning in August 2017, as both commodities were being sold at double the price of both last year and last month.

It was more than the usual fleecing that goes on around and after Eid-ul-Adha, as some supply side shocks ensured tomatoes would become a pricey commodity. Bulk of the food sub-index increase was due to perishable items. The non-perishable food items actually saw a decline month-on-month, but that was too little to reverse the trend in overall food prices.

But not every other commodity has been dearer over last year. You are saving a little over 16 percent if you are smoking or drinking. So, health may well have become 11.4 percent dearer over last year, and education 8 percent – the cigarette savings almost make up for that hike. Recall that cigarette makers were incentivized in the last budget to compete against counterfeit and illicit tobacco imports. The results have been impressive. One wonders, if any such scheme in the pharma sector is in the offing too.

The month-on-month CPI recorded a 0.63 percent increase – a six-month high. Perishable food items were single handedly responsible for the rise with an impact of 0.73 percent. The impact of quarterly revision in house rent sub index was also recorded in the preceding months. The transport sub-index also increased after upward revision in petroleum prices last month.

The downtrend in international commodity prices is well reflected in most sub heads, especially that of transport. Oil prices have finally woken up from the slumbers and crossed $50/bbl after quite some while, and the petroleum prices have also been increased for October, which would be reflected in next month’s CPI. The recent trend in oil prices suggest near-to-medium term upward pressure on oil prices, which could jack up the transport index directly, and along it, some items in the food index.

While there are signs that suggest inflation could stay north of 4 percent in the near term, it is nowhere near worrisome. Inflation has more often than not been the sole variable being cited by policymakers deciding on the monetary policy. By that token, expect no changes in the policy anytime soon. Only that the fiscal deficit sits at fearsome levels and reasons are plenty to look beyond inflation.