India's Inflation Shockwave: October 2025 CPI Data is HERE - Will Markets Soar or Sink?

Consumer Price Index (CPI) or retail inflation data for India in October 2025 is being closely monitored. This report measures the average change over time in the prices of a basket of consumer goods and services purchased by households. It is a key indicator of inflation and is critically important for policymakers, especially the Reserve Bank of India (RBI), when deciding on monetary policy, including interest rates.

Impact: If inflation is higher than expected, it could prompt the RBI to consider raising interest rates to curb price rise, which might slow down economic growth and negatively impact equity markets. Conversely, if inflation is lower than anticipated, it could lead to interest rate cuts or a pause, potentially boosting stock markets and consumer spending.

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Difficult Terms: Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in CPI are used to gauge inflation. Retail Inflation: Inflation rate as measured by the Consumer Price Index (CPI), reflecting price changes for everyday goods and services purchased by consumers.

Reserve Bank of India (RBI): India's central bank, responsible for regulating the country's currency, money supply, and credit system. It plays a crucial role in managing inflation and economic stability through monetary policy tools.