Retail inflation cut short its three-month declining trend and inched up to seven per cent in August mainly due to higher food prices, according to official data released on Monday.

The consumer price index (CPI) based inflation was 6.71 per cent in July and 5.3 per cent in August 2021.

The CPI inflation has remained above the RBI's comfort level of six per cent for the eighth month in a row. The Reserve Bank factors in retail inflation while deciding on its monetary policy.

According to the data released by the National Statistical Office (NSO), inflation in food basket was 7.62 per cent in August, up from 6.69 per cent in July and 3.11 per cent in August 2021.

The rate of price rise was in excess of 10 per cent in case of vegetables, spices, footwear, and 'fuel and light' on annual basis.

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The IIP had grown 11.5 per cent in July 2021

However, there was contraction in inflation in egg and almost flat in protein rich 'meat and fish' during the month.

Inflation had reached a high of 7.79 per cent in April before decelerating in the next months to 6.71 per cent in July.

The government has tasked the Reserve Bank to ensure CPI inflation remains at four per cent with a margin of two per cent on each side.