It has been on the rise for the fourth successive week now. The latest 0.08 per cent increase was on account of jump in prices of tea, arhar, rice bran oil, solvent extracted groundnut oil, caprolactum and zinc. The buoyancy in inflation rate was despite considerable fall in prices of sunflower, raw rubber, linseed oil, spanners and power driven pumps.

Inflation had maintained its 17-year low level for 13 continuous weeks since June 19 when it plummeted to 2.53 per cent. It had come down to below the two per cent level on July 3 for the first time in 17 years when it reached 1.83 per cent. It was in single digits for more than four years since April 15, 1995 when it touched 9.90 per cent (final).

A recent decision to hike the diesel prices and upward trend in worldoil prices is likely to boost the inflation rate in the coming months. The increase in administered prices of diesel prices would push up transportation and other related costs. An analyst predicted that the hike would have a cascading effect and push up prices of other goods.

According to investment banking firm ICICI Securities and Finance the inflation rate is expected to go up from November due to rise in petroleum prices. However, it is not likely to rise beyond five per cent by the end of this fiscal.

For the last couple of months, the inflation rate had been showing a declining trend mainly due to the record production of food grains and oil seeds. Another reason for the inflation rate to recede was the sluggish demand due to recession in the industry.

Inflation based on consumer price index for industrial workers fell further by 2.10 per cent to 3.16 per cent in July from 5.26 per cent the previous month. Due to increase in indices of food articles and non-food articles, the wholesale priceindex for all commodities witnessed an upward trend.