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| Version 2 | Version 3 |
|---|---|
| India inflation rate rises to 11% | India inflation rate rises to 11% |
| (30 minutes later) | |
| Indian inflation has risen to a new 13-year high, hitting shares and weakening the rupee. | |
| Wholesale price inflation rose by 11% in the 12 months to 7 June, up from the previous week's 8.75%. The inflation rate is now at its highest since 1995. | Wholesale price inflation rose by 11% in the 12 months to 7 June, up from the previous week's 8.75%. The inflation rate is now at its highest since 1995. |
| Rising fuel and food costs are pushing inflation well above the government's target of between 5% and 5.5%. | |
| The jump took many analysts by surprise. More interest rate rises are now expected. | |
| By midday in Mumbai (Bombay), India's main Sensex index had dropped 319.8 points, or 2%, to 14,768.3 and analysts expected shares to move lower still. | |
| "The market will probably drop further because nobody will be brave enough to buy, said Jayant Pai, an assistant vice president at investment bank IL&SS. | |
| Shares have slumped since the Sensex broke through the 21,000 level earlier this year. | |
| Election | |
| The BBC's Sanjoy Majumder in Delhi says the latest figures come at a bad time for the governing party, which is facing elections in a number of states this year. | |
| Unlike most countries, India calculates inflation on the wholesale price of a basket of 435 commodities, which means actual prices paid by the consumer are much higher. | Unlike most countries, India calculates inflation on the wholesale price of a basket of 435 commodities, which means actual prices paid by the consumer are much higher. |
| Cooking gas prices have risen by 20% and diesel is up 21%. | Cooking gas prices have risen by 20% and diesel is up 21%. |
| Although an election must be held by May 2009, our correspondent says there is some suggestion it may be held later this year. | Although an election must be held by May 2009, our correspondent says there is some suggestion it may be held later this year. |
| With the central bank expected to increase interest rates to try to control inflation, India's economic growth is expected to slow down and combined with rising prices, this may translate into voter anger, our correspondent adds. | With the central bank expected to increase interest rates to try to control inflation, India's economic growth is expected to slow down and combined with rising prices, this may translate into voter anger, our correspondent adds. |
| Rate rises | Rate rises |
| Last week, India's central bank raised short-term borrowing rates from 7.75% to 8%. | Last week, India's central bank raised short-term borrowing rates from 7.75% to 8%. |
| The unexpected rate increase was the first since March 2007. | The unexpected rate increase was the first since March 2007. |
| The Reserve Bank of India is keen to address spiralling inflation. | The Reserve Bank of India is keen to address spiralling inflation. |
| But there are concerns that interest rate rises will not do anything to curb rising energy prices, which saw India recently cut fuel subsidies. | But there are concerns that interest rate rises will not do anything to curb rising energy prices, which saw India recently cut fuel subsidies. |
| This sparked protests in many parts of the country from consumers and transport operators. | This sparked protests in many parts of the country from consumers and transport operators. |
| India imports nearly 75% of its crude oil requirements but subsidises the cost of domestic fuel products. | India imports nearly 75% of its crude oil requirements but subsidises the cost of domestic fuel products. |