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

It had maintained its 17-year low for 13 continous weeks since June 19, when it plummeted to 2.53 per cent. It had come down below 2 per cent on July 3 for the first time in 17 years, when it stood at 1.83 per cent.

It had not touched the double-digit figure 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 anupward trend in world oil rates could give a boost to the inflation rate in the months to come. The Government had increased the administered prices of diesel, which would help in pushing up the transportation and other related costs. An analyst had predicted that the hike would have a cascading effect and push up the prices of other goods. According to investment banking firm ICICI Securities the inflation rate is expected to go up from November due to rise in petroleum prices. However, it is not likely to rise beyond 5 per cent by the end of this fiscal.

For the last couple of months, the inflation rate was showing a declining trend mainly due to the record production of foodgrains and oilseeds. Another reason for the inflation rate to recede was the sluggish demand due to recession in the industry. The inflation rate, based on the Consumer Price Index for Industrial Workers, which is a reflection of the retail prices, fell further by 2.10 per cent to 3.16 per cent in July, from 5.26 per cent in theprevious month.