Inflation has touched a 3-1/2 year high at 7.61 percent as on April 26 compared to 7.57 percent previous week, as per the data released by Government. Rising prices for food and vegetables may cause big trouble for UPA government in upcoming elections. Government is taking measures to curb inflation and has urged industry leaders to reduce prices.

Market analysts believe that Inflation may remain stable around these levels before showing signs of weakness. Efforts made by finance ministry will bear fruits, but it may take some time for prices to come down. Crude Oil above $120 per barrel will make it difficult for government to keep prices lower.

Oil prices are touching all time high and prices are rising in almost all economies in the world. Oil companies are planning to reduce Diesel imports as the loss pool has grown much higher. Companies will meet government officials to discuss a hike in fuel prices at earliest.

Steel companies agreed to lower the prices. Many steel majors including Essar Steel and ISPAT reduced their prices recently. Cement companies have also assured government to reduce the prices to help reducing inflation.