October inflation surge may hit housing demand, raise RBI hike bets
In short
Retail inflation rose to 6.09% in October on Thursday. Industry bodies said the jump could reduce household spending power and make people spend less on housing.
They also said the higher inflation could increase worries that the Reserve Bank of India may raise rates again.
What the reporting says
Rising retail inflation to 6.09% in October could weaken household purchasing power and curb discretionary spending, including on housing, industry bodies said on Thursday. Knight Frank and PHDCCI linked the jump in consumer price inflation to pressure on demand and the possibility of further monetary tightening by the Reserve Bank of India. The brief points to higher rate-hike concerns for the market.
Why it matters
Retail inflation rose to 6.09% in October, and Knight Frank and PHDCCI said the increase could hurt household spending power and reduce discretionary outlays such as housing. They also said the reading may raise expectations of further RBI tightening. The market implication is a possible drag on housing demand and higher rate-hike concerns for borrowers and developers.