It is reported that inflation raced to a fresh high of 11.89% for the week ended June 28th 2008, on the back of surging food and commodity prices. The 10 years benchmark yield crossed 9.5%. Inflation trend continues to remain higher and is expected to touch 11.9% next week ended July 4th 2008.

According to the report, inflation had already soared to 11.63% for the week ended June 21st 2008. Sadly, there is no respite in sight from this soaring inflation. Finance ministry officials have already said that inflation could inch up to 13% before making a slow descent.

Experts too are of the opinion that double digit inflation is here to stay for some more time but could trend down in September 2008. With prices of crucial commodities like steel likely to up further, inflation is expected to stay over 11% before it peaks around September 2008.

It is estimated that steel and steel products used in industries like auto, housing, white goods, capital goods are contribute almost 21% to inflation. Cement prices are expected to remain soft. It is the 20th consecutive week that the inflation rate has been above 5.5%, the central bank's target for the end of the fiscal year in March 2009.

Mr P Chidambaram finance minister said that the government is relying on monetary policy to cool demand and calm prices. On June, the central bank raised its main lending rate by 75 basis points and increased banks' reserve requirement by 50 basis points to contain inflation expectations. Its next scheduled review is on July 29th but it can act before then.