Wholesale Price Index-based inflation jumped from 6.87 per cent in July to 7.55 per cent in August, figures released by the commerce ministry showed.

The government is yet to revise the final inflation rate for August, and many are of the view that the revised rate of inflation for August could actually be as high as 8 per cent.

In August, prices of eatables jumped 9.14 per cent, while prices of non-food manufactured goods climbed 5.58 per cent. Fuel & power group index jumped 3.1 per cent.

As the August inflation rate was much higher than the Reserve Bank of India’s upper limit of 5 per cent, Gov. Duvvuri Subbarao is improbable to slash key interest rates.

The government has recently increased the prices of diesel by Rs 5 a litre, thus the rate of Wholesale Price Index-based inflation is expected to jump further.

Brinda Jagirdar, general manager of SBI’s economic research department, said, “The fuel price hike will push up headline inflation number going forward.”

Indranil Sengupta, an economist at Merrill Lynch, has estimated that rate of inflation will remain between 8 per cent and 8.5 per cent in the current fiscal.

In a recent snap poll of 18 economists, almost all expected the Reserve Bank of India to leave rate of its policy repo untouched at 8 per cent.