Ahead of the Reserve Bank's busy season credit policy review on October 31, inflation shot up to four month high of 5.26 per cent for the week ended October 14 mainly due to increase in prices of food and manufactured items.
The recent upward inflation trend is likely to put pressure on interest rates as RBI had raised its two key short term interest rates by 0.25 per cent in July, the fifth such increase since October 2005 to manage inflation.
The wholesale price based inflation at 5.26 per cent, was higher than 5.16 per cent in the previous week and 4.77 per cent in the corresponding week last year.
This was the highest inflation in 17 weeks after it touched 5.44 per cent during the week ended June 17.