Seven-month high for Indian inflation

<p>Indian inflation is up to a seven-month high.</p>

Inflation in India has hit a new seven-month high, prompting speculation the country may act to bring the rate under control.

The Wholesale Price Index, which is the Asian nation's main gauge of inflation, hit 6.46 per cent from a year earlier, a figure that is up from 6.1 per cent in August.

Commenting on the new data, Badrish Kulhalli, a fixed-income fund manager at HDFC Standard Life Insurance, explained this will be of no comfort to the Reserve Bank of India (RBI).

He explained it also sets the country up "for a rate hike in the upcoming policy review at the end of the month".

India's central bank recently raised its key interest rates to 7.5 per cent from 7.25 per cent, but this does not seem to have had a positive impact on inflation yet.

When the interest rate rise was announced, Anjali Verma, chief economist at PhillipCapital, explained the news had come as a surprise to analysts, who had expected rates to be held by the RBI.

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