ECoNoMy// According to data released by the government in October 2014, food inflation fell to a nearly two-and-half year low of 3.52 per cent. Wholesale inflation fell to a near five-year low in September, owing to a sharp decline in fuel and food prices, raising hopes following an equally steep fall in consumer inflation that the Reserve Bank of India may begin to cut interest rates sooner than expected to boost the faltering economic recovery.

Inflation based on Wholesale Price Index (WPI) eased to 2.38 percent in September, compared to a year ago, well below 3.74 percent in the previous month and lowest since 1.78 per cent in October.

Food inflation has been declining since May. The sharp drop in WPI inflation comes just at the back of retail inflation declining to a record low of 6.46 per cent in September.

Wholesale inflation in onion contracted to 58 percent in September, as compared to a contraction of 44.7 per cent in August. While inflation in vegetable basket as a whole shrunk to 14.98 percent in September, rate of price rise in potato was 90.23 percent from 61.61 percent in August.

The data revealed that inflation in milk, eggs, meat and fish continued to decline in September as well. However, there was slight increase in the prices of fruits during the period. Inflation in manufactured products, such as sugar, edible oils, beverages and cement, fell to 2.84 percent in September as against 3.45 per cent in August.