NEW DELHI (AP) -- India's key inflation rate jumped to a seven-year high of 8.75 percent for the last week of May, the Ministry of Commerce said Friday.
The whole price index was up sharply from 8.24 percent the previous week, lifted mainly by food and manufactured goods. A year ago, the inflation rate was 5.09 percent.
The news came a week after the government raised fuel prices because it had to cut subsidies amid soaring crude oil prices. But that fuel hike -- which lifted gasoline prices about 10 percent in New Delhi -- was not included in the most recent data, which covered the week ending May 31.
The rise sparked fears that inflation would accelerate, with analysts warning that India could see inflation cross 9 percent in coming weeks. That would be especially hard on the poor.
''The current number is clearly above our expectations,'' Shubhada Rao, chief economist at Yes Bank.
The government and the Reserve Bank have taken steps to reverse inflation, including a quarter-point hike in short-term lending rates to banks.
The WPI, which measures producer prices, is used as a proxy for inflation because as the government reports wholesale price data more quickly and comprehensively than consumer price data.