There is unlikely to be any good news on the inflation front with prices rising above the Reserve Bank of India’s medium term target in August, a Reuters poll has showed.

The poll of nearly 50 economists showed retail inflation to rise 6.85 per cent for the month because of supply disruptions which kept food and fuel prices high. Though this is lower than the 6.93 per cent rise in July, it still means that headline CPI inflation is above the RBI’s target of 2-6 per cent for the fifth straight month.

This would disappoint those expecting another round of interest rate cut from the RBI. The central bank has since March brought down the policy repo rate by 115 basis points. However, firm inflation saw the monetary policy committee deciding on a status quo in the August policy.

A report from the economic research wing of State Bank of India (SBI) also expects inflation to be well above the 6 per cent mark in August.

Attributing the recent surge in retail inflation to huge government procurement and supply disruptions on account of the Covid-19 pandemic, the SBI report said the rate of price rise was likely to come down to below 4 per cent only after December.

The Consumer Price Index (CPI) inflation during August was likely to remain at about 7 per cent, SBI Ecowrap said. The data is scheduled to be released on Monday.

However, the report said that it looks difficult to believe that supply disruptions would normalise soon.