Driven by costlier food items, retail inflation inched up to a 10-month high of 3.21 per cent in August, but remained within the RBI’s comfort level and may prompt the central bank for one more round of rate cut as another set of government data revealed industrial production growth slowed to 4.3 per cent in July.

Inflation based on the Consumer Price Index (CPI) stood at 3.15 per cent in July. Compared year over year, it was 3.69 per cent in August 2018.

The August 2019 retail inflation rate is the highest since October 2018, when it was recorded at 3.38 per cent.

Inflation in the food basket was 2.99 per cent, up from 2.36 per cent in July.

The August data released by the National Statistics Office in the Ministry of Statistics and Programme Implementation on September 12 also provided details of inflation in segments like health, recreation and amusement and personal care and effects.

The retail inflation in health was 7.84 per cent, recreation and amusement 5.54 per cent and personal care and effects 6.38 per cent.

Price rise in the education segment was recorded at 6.10 per cent in August.

Inflation in meat and fish basket was 8.51 per cent, pulses and products 6.94 per cent and vegetables 6.9 per cent.

The National Statistics Office on Index of Industrial Production (IIP) showed that slowdown in factory output was mainly due to the poor show by the manufacturing sector.

The industrial output growth was recorded at 1.2 per cent in June and 4.6 per cent in May this year.

According to data released by the Ministry of Statistics and Programme Implementation, industrial output grew at 3.3 per cent in the April-July period this fiscal, down from 5.4 per cent growth in the same period a year ago.

The IIP data showed a significant slowdown in the manufacturing sector, which grew at 4.2 per cent in July as compared to 7 per cent a year ago.

The capital goods segment, which is a barometer of investment, saw a contraction of 7.1 per cent in July compared to 2.3 per cent rise a year ago.

Mining growth was 4.9 per cent in July as compared to 3.4 per cent in the same month last fiscal.

The expansion in the power generation sector stood at 4.8 per cent in July, compared to 6.6 per cent a year earlier.

As per use-based classification, the growth rates in July over July 2018 are 3.5 per cent in primary goods, 13.9 per cent in intermediate goods and 2.1 per cent in infrastructure / construction goods.

Consumer durable and consumer non-durable have recorded growth of -2.7 per cent and 8.3 per cent, respectively.

The RBI, which mainly factors in CPI for arriving at its bi-monthly monetary policy, has been mandated by the government to ensure that inflation remains at 4 per cent, with deviation of 2 per cent on either side.

The central bank, which has already reduced the key policy rate four times in the current calendar year, is scheduled to announce its next monetary policy on October 4.