Food inflation eased a tad to 12.47 per cent for the week ended July 10 from 12.81 per cent in the previous week owing to a marginal fall in prices of essential items such as pulses, vegetables and wheat, apart from the effect of a high base as the food price spiral in the like period last year was at 11.93 per cent.

Even as the softening trend in food inflation is expected to be more pronounced in the coming weeks following a good monsoon, the cascading impact of the hike in fuel prices, especially that of diesel, is yet to be fully reflected in the prices of other items although the category-wise inflation for ‘fuel, power, light and lubricants' remained steady at 14.27 per cent for the week.

The prime concern for the government is that both the WPI (Wholesale Price Index) based food and headline inflation have remained in double digits, despite the high base effect, and a discernible decline is not expected before September.

More In: Economy | Business