New Delhi, Sept. 16 -- India's headline inflation jumped to 4.8% in August, food inflation to 6.0%, core inflation to 4.3%, and core excluding gold and silver prices to 3.1%. The sharp rise in input prices is still feeding through to consumers, while crude oil prices have flared up again.

An unfavourable base effect over the next few months is expected to push inflation print higher. Add to this stronger-than-expected GDP growth of 7.8% in Q1 FY27, hawkish comments in the August monetary policy committee (MPC) minutes, rainfall deficiency that could keep food prices firm, and an expected rate-hike cycle by the US Federal Reserve. Many economists now see the RBI beginning its rate hike cycle as early as next month.

For months, economists...