The battle against inflation is entering a tougher phase: What it means for you

India’s retail inflation rose to 5.54% in September, its highest level in nearly two years, driven by rising food, fuel and transport costs. Rural households have been hit particularly hard, with food inflation crossing 8%. The surge comes amid elevated global crude oil prices, a weakening rupee and continuing uncertainty in West Asia. With inflation nearing the RBI’s upper tolerance limit, questions are growing over whether another interest rate hike could be on the horizon. This explainer examines what’s driving inflation, why food prices are rising and what it could mean for consumers, investors and the broader economy.