Mumbai: The annual rate of inflation based on the wholesale price index rose to 8.75 per cent for the week ended 31 May from 8.24 per cent the previous week, due mainly to rising prices of food articles and vegetable and a recent hike in the administered prices of fuels.

The spike in inflation has been attributed to a rise in the prices of milk, pulses, spices, fruit and vegetables.

This is also the highest level of inflation during the UPA regime, up from the provisional estimate of 8.33 per cent in the week ended 28 August 2004.

Once the impact of rise in prices of petrol, diesel and cooking gas, announced earlier this month, is taken into account, the inflation, which is now at a seven-year high, would go past the 9.0 per cent mark when early June figures come out.

The Reserve bank of India (RBI) had, meanwhile, raised the repo rate on Wednesday by 0.25 per cent to 8.0 per cent, prompting banks to consider a rise in lending rates for consumers and industry.