Inflation rose to 11.89 per cent mainly due to higher prices of essential food items and some manufactured products such as cement and edible oils, which may prompt Reserve Bank of India to further tighten money supply in its quarterly review slated for July 29.
During the week ending June 28, inflation moved up by 0.26 per cent from 11.63 per cent in the previous week and 4.42 per cent in the corresponding week a year ago.
The wholesale price index-based inflation inched up on account of higher prices of fruits, vegetable, pulses, spices, and bajra.
Despite attempts made by the government to tame price rise, items like cement and edible oils became costlier during the week.
RBI has already increased repo rate and CRR by 0.5 per cent each to tame inflation on June 24.
Global credit rating agency Moody's said, "if the whole-sale price growth continues to accelerate...the RBI looks set to further curb lending."
It also said that the countrys' GDP growth would moderate this year amid slowing exports and softening domestic demand.
RBI has already increased repo rate and CRR by 0.5 per cent each to tame inflation on June 24.
Meanwhile, Yes Bank Chief Economist Shubhada Rao said, high inflation and slowdown in the industrial growth pose a dilemma for the policy makers.
It is unlikely that the RBI would tinker with the rate on July 29. It may raise rates after July, she said.
During the week, fuel, power, light and lubricant group remained unchanged at previous week level.
Among other food articles, prices of mustard seed, went up by four per cent, castor seed by seven per cent and sunflower five per cent and tobacco by two per cent.
Manufactured items like mustard oil became expensive by five per cent, soyabean oil by four per cent, khandsari by one per cent.
At the same time, prices of cotton yarn went up by nine per cent, polyester staple fiber by eight per cent and cotton yarn cone by one per cent.
Elsewhere, prices of telephone instruments increased by 19 per cent and cranes and air conditioners by six per cent each.
However, prices of the basic pig iron and foundry pig iron declined by eight per cent, steel sheets and strips by six per cent and other iron steel by two per cent.
The government, meanwhile, has revised inflation data for the week ended May 3 to 8.73 per cent from the provisional figure of 7.83 per cent.
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