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India inflation rises, dampens rate cut hopes

Published on Oct 15, 2012 3:31 PM

NEW DELHI (AFP) - Indian inflation accelerated to its highest level this year, hitting 7.81 percent in September, data showed on Monday, outpacing market forecasts and reducing the chances of an interest rate cut.

The country's hawkish central bank will meet at the end of the month to consider its interest rate policy as it faces calls from businesses to cut rates to spur economic growth that has slowed dramatically.

The Wholesale Price Index - India's most widely watched inflation measure - rose 7.81 percent year on year last month - just exceeding market forecasts of 7.7 percent.

The reading was up from 7.55 percent the previous month and 6.87 percent in July, which was close to a three-year low.

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