Retail inflation rose to 6.1% in October 2026, crossing the Reserve Bank of India’s (RBI) upper threshold for the first time in two years. The continued uptick in inflation, while driven by food and fuel prices, has now spread to nearly all sectors, data released by the government on Thursday shows.
The RBI targets an inflation rate of 4% with a comfort band of 2% higher or lower than figure. Inflation as measured by the Consumer Price Index (CPI) last crossed this upper threshold of 6% in October 2024, when it came in at 6.2%. Retail inflation in October 2026 was the highest since then.
The new series of the CPI, with a base year of 2024, has sectoral data that goes back to only January 2026, which means a historical analysis is possible only up to that point. Within that, the latest data shows inflation across most categories rose to series highs in October 2026.
“Although inflation remains predominantly supply-driven, stronger consumer demand pull associated with festive-season purchases may have added to price pressures, reinforcing the RBI’s decision to raise the repo rate by 25 basis points to 5.50%,” Pranjal Ghate, economist at Brickwork Ratings said, referring to the Monetary Policy Committee’s (MPC) latest decision in early October 2026.
Eating becomes costlier
The data shows that inflation in the food and beverages category rose sharply to 8.5% in October 2026, the highest in the series. Coupled with this, rising fuel prices meant that inflation in the transport category also rose to 5.8% in October, a series high.
As a result of accelerating food and transport prices, inflation in the restaurant and accommodation services category jumped to 10.1% in October, the first time it has come in at double-digits in the new series.
According to Madan Sabnavis, chief economist at the Bank of Baroda, some food prices could rise further in the coming months.
“The ongoing harvest prospects will throw more light on how food prices behave,” Mr. Sabnavis said. “Area under cultivation was lower for rice, maize, oilseeds, cotton and sugarcane. It has also been reported that pulses production, especially tur, could be lower this time, which can lead to a spike in prices.”
Rising day-to-day prices
Apart from food and fuel, the data shows that other aspects of day-to-day life have also seen prices rising at a faster pace.
Clothing and footwear, for example, saw inflation coming in at nearly 5% in October 2026 — the highest in this series — from 3.9% in the previous month. The ‘furnishings, household equipment, and routine household maintenance’ category saw inflation quicken to 3.9% in October, also a series high.
Inflation in the health category quickened to 2.05% in October 2026, the highest since January, from 1.4% in September.
The ‘housing, water, electricity, gas and other fuels’ category saw inflation of 2.9% in October, also the highest in the series.
Other services get pricier too
Education services saw inflation touch the 4% target for the first time in the new series, while inflation in the information and communication category rose to a series-high of 3.2% in October 2026.
Recreation, sports, and culture saw inflation rise to 2.5% in October 2026, also the highest in the series.
The only category that saw some relief in October was the broad ‘personal care, social protection and miscellaneous goods & services’ category, which saw inflation ease to 10.1%, the lowest it has been in the new series of the CPI.
“The latest reading makes it increasingly difficult for the MPC to justify holding rates unchanged at its next meeting [in December], strengthening the likelihood of another 25-basis-point hike,” Mr. Ghate said.
Published – November 12, 2026 06:53 pm IST
