This sudden rise in wholesale inflation may affect the economy in several ways. Higher inflation can mean increased costs for businesses, which might impact their profits. Eventually, these costs may be passed on to consumers in the form of higher prices for goods and services. This can also influence fiscal and monetary policies as authorities might increase interest rates to curb inflation. Investors might react negatively to rising inflation as it can erode the value of future cash flows, leading to potential volatility in financial markets. However, if the rise is caused by increased demand, it may signal economic recovery, and in the long run, it might lead to wage growth.
Wholesale inflation rose 0.6% in February, much more than expected
