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SBI Research Predicts Soaring Inflation: CPI to Hit 6.5% in Oct-Nov, Rate Hike Expected
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News18•02-10-2026, 13:15
SBI Research Predicts Soaring Inflation: CPI to Hit 6.5% in Oct-Nov, Rate Hike Expected
- •SBI Research forecasts CPI inflation to reach 5.65% in September and exceed 6.5% in October-November, before easing in early 2027.
- •The Reserve Bank of India (RBI) is expected to raise the policy repo rate by at least 25 basis points at its October 5-7 monetary policy meeting due to rising inflation, global risks, and pressure on the rupee.
- •Broadening inflationary pressures, worsening global macroeconomic conditions, changing liquidity, and repricing of global risks are driving the shift towards a rate hike.
- •Inflationary pressures have intensified since August, with retail inflation rising to 4.82% in August from 4.45% in July, and price pressures spreading across more commodities.
- •Weakness in the rupee, attributed to a strong US dollar, foreign currency demand, and FPI selling, along with risks from a weak monsoon and El Niño conditions, are also flagged as concerns.
Key Questions Answered
SBI Research expects CPI inflation to rise to about 5.65 per cent in September 2026, cross 6.5 per cent in October and November, and then ease below 6 per cent in early 2027.
SBI Research believes the balance of risks has shifted toward a rate hike due to broadening inflationary pressures, worsening global macroeconomic conditions, changing liquidity, and pressure on the rupee.
Retail inflation rose to 4.82 per cent in August 2026 from 4.45 per cent in July, while the southwest monsoon stood at 87 per cent of the long-period average with 43 per cent of districts receiving deficient rainfall.
