Mumbai: The annual rate of inflation based on the wholesale price index rose 0.29 percentage points to 3.79 per cent during the week ended January 5 from 3.50 per cent in the previous week, on persistent pressure on oil and food prices.

The inflation rate rose during the previous week as well even as prices of some essential food items like vegetables and fruits fell.

Although prices of essential food items like fruits and vegetables declined, prices of certain fuel items like coking coal, non-coking coal, furnace oil, bitumen, light diesel oil and naptha went up, while aviation turbine fuel became cheaper during the week ended January 5.

Prices of some manufactured products like metals and alloys also rose during the period.

The inflation rate is expected to shoot up once the government decides to hike petroleum prices, a decision on which is expected in a day or two.

The wholesale price-based inflation was way above at 6.37 per cent in the year-ago period.

The Reserve Bank of India (RBI) will hold a quarterly rate review on January 29 and analysts expect the RBI to keep interest rate policy unchanged.

The RBI aims to keep inflation below 5 per cent for the fiscal year that ends on 31 March 2008. In fact, the inflation rate has remained below that level for 31 successive weeks.

Over time, the central bank aims to condition inflation expectations to around 4.0-4.5 per cent and has a medium-term goal for inflation of about 3.0 per cent.

However, the economic advisory panel to the prime minister in a report yesterday warned of continued inflationary pressure in 2008-09 and said high global oil and commodity prices would make inflation management "quite challenging".