Headline inflation surged sharply to its highest level in more than a year, maintaining pressure on the RBI for a fresh dose of interest-rate hikes despite flagging economic growth.

The Wholesale Price Index-based inflation estimate rose an annual 9.78 per cent in August, higher than the previous month’s 9.22 year-on-year increase, Government data showed on Wednesday.

Sharply higher year-on-year inflation in food items, including vegetables such as onions and potatoes, and fuel products led to the spike in the headline estimates. Manufactured products, especially processed food items such sugar and edible oils, too saw a surge during the latest reported month.

The central bank has raised interest rates 11 times since March 2010 to combat runaway inflation and is expected to tighten them one last time before a possible pause in its stance. The RBI is widely expected to raise rates by another 25 basis points at its mid-quarter policy review on Friday.

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