New Delhi  - India's inflation rate rose to 8.75 per cent in the week ending May 31, up from the previous week's 8.24 per cent, to touch a seven-year high, according to government data released Friday.

The inflation rate, linked to India's wholesale price index, was likely to rise further once the impact of a fuel price hike announced June 5 by the federal government is felt, analysts said.

Inflation is at its highest level since February 2001 when it stood at 8.77 per cent.

The wholesale price index for manufactured products was up 0.7 per cent while that for food articles was up 0.9 per cent.

Analysts predicted that the inflation rate was likely to touch 10 per cent over the next few weeks.

Opposition political parties have been holding protests against rising prices, which were expected to adversely impact India's ruling United Progressive Alliance (UPA) in general elections scheduled to be held in 2009. A slew of state assembly elections are also due over the next six months.

The central Reserve Bank of India raised its key lending rate to banks by 25 basis points to 8 per cent last week to contain inflation and was expected to take further monetary control measures.

The UPA government has said the spiralling inflation is linked to rising oil and global commodity prices. It has cut import duties on edible oil, curbed rice exports and forced steel and cement companies to bring down prices to try to control inflation.

The Indian economy has grown at an average of 9 per cent for the past three years but was likely to see a slowdown in 2008 with the rising prices and interest rate hikes. (dpa)