What is the significance of wholesale and retail inflation rates diverging

The WPI inflation for October has touched a 40-month low. But retail inflation in the country for the same month has touched a 16-month high.

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This deceleration in wholesale prices has happened despite a significant jump in wholesale food prices.

On Thursday, the official data showed that the wholesale inflation in the country for October grew by just 0.16 per cent. In October last year, it grew by 5.5 per cent. As the chart alongside shows, the rate of wholesale inflation has been falling steadily.