The marginal increase has broken a seven-week fall in the rate of inflation, based on the wholesale price index (WPI), as prices of vegetables and pulses started picking up again.

Though vegetable prices are still way below last year's levels, they have been slowly firming up. In the last one month alone the index for vegetables has risen by about 8 per cent. However, this is 36 per cent lower than the prices prevailing last year.

During the current week, the rate of increase in prices was 0.02 percentage points to 1.85 per cent (provisional) from 1.83 per cent last week. In comparison, the inflation rate was at 8.08 per cent in the corresponding week last year. Last week's inflation rate was the lowest since August 1982 when it touched 1.66 per cent.

The downward trend in inflation rate this year is mainly due to thebumper foodgrain production and the resultant lower prices compared with last year.

The downward pressure on prices of manufactured products, which account for 57 per cent of the weight in the index due to slack industrial demand, also kept the inflation rate low.