Mumbai: The annual rate of inflation based on the wholesale price index eased to 3.23 per cent for the week ended September 15 from 3.32 per cent in the previous week even as the consumer price index (CPI) ended higher at 7.26 per cent in August against 6.45 per cent in July.

At 3.23 per cent, the more closely watched annual rate of inflation is also the lowest since mid-December 2002.

The CPI rose by a point to 133 in August from July, mainly due to an increase in food prices, the government said.

The inflation rate stood at 5.27 per cent in the corresponding week a year ago.

The decline in inflation rate was mainly due to fall in prices of fruits and vegetables, pulses, milk and some manufactured items, official data showed.

Among manufactured items, coconut oil declined by four per cent, while zinc softened by 10 per cent followed by aluminium ingot and other aluminium materials.

However, prices of cement moved up by 0.2 per cent during the week followed by other items like steel furniture and hydraulic pump.

However, the falling trend could be reversed if the government opts to raise retail fuel prices, which have not been increased this year even though oil has risen to record highs above $83 a barrel.

also see : General reports on Economy