Mumbai: The annual rate of inflation based on the wholesale price index rose to a 10-month high of 5.02 per cent for the week ended February 23, from 4.89 per cent in the previous week.

Inflation rate was last above five per cent (5.06 per cent) on May 19, 2007.

The inflation rate stood at 6.20 per cent in the corresponding week a year ago.

During the week under review, food and some manufactured products turned costly.

Prices of seafood (fish), mutton, fruits, vegetables and milk went up, while prices of arhar and moong declined.

The index for fuel, power, light and lubricants remained unchanged despite a hike in petrol and diesel prices announced by the government on February 14.

Among manufactured products imported edible oil, vanaspati, coconut oil and mustered oil got expensive. 

A higher inflation rate is expected to add to the Reserve Bank's policy dilemma amidst slowing growth and rising inflation.

The central bank has kept its key lending rate unchanged at 7.75 per cent for almost a year, after raising it five times between June 2006 and March 2007.

A higher inflation rate is also likely to dampen prospects of a general reduction in home lending rates by banks.