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CPI Inflation: At 10-Year Low, opens up space for rate cut

ICICIdirect Research 14 Nov 2025 DISCLAIMER

The CPI inflation for the month of October came in at a 10-year low of 0.25% as against 1.44% in September and lower than market expectation of around 0.5%.
The fall was largely driven by favourable base effect particularly in food inflation and impact of GST rate-cut in core group items like clothing and footwear, transport and communication and recreation.
Food inflation fell sharply to -5% contributed by MoM decline in Cereals, vegetables, Fruits and pulses apart from base effect.
Core inflation remain largely at similar levels as decline in inflation in most major items was offset by sharp rise in personal care and effect inflation driven by gold prices (up 24% YoY and 6% MoM). Gold contribution to inflation has further increased to around 90bps. Ex-Gold, CPI would have been at -0.35% while Core inflation would have been at 3.5%.
RBI's FY26 inflation forecast of 2.6% is likely to get further downgraded which may open up space for a 25bps rate cut in its December policy meeting

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