New Delhi, Dec. 13 -- As the base effect on food fades, headline Consumer Price Index or retail inflation is likely to edge up slightly to average at 2.5 per cent this financial year 2025-26, Crisil has asserted.

"While weak global crude prices should continue anchoring fuel inflation, GST rate cuts will support core inflation. We expect CPI inflation to average 2.5 per cent this fiscal," rating agency Crisil said in a note.

Inflation based on the Consumer Price Index (CPI) quickened to 0.7 per cent in November from 0.3 per cent in October, driven by the slower pace of deflation in the food and beverages category and a pick-up in fuel and light inflation.

An increase in retail inflation reduces consumers' purchasing power, making goods...