Mumbai: Rising inflation, fuelled by high energy and commodity prices, and interest rate hikes by the Reserve Bank of India could lower the country's economic growth, analysts and economists say.

The annual rate of inflation based on the wholesale price index rose 0.37 basis points to 11.41 per cent in the week ended 14 June from 11.04 per cent the week before, pushed by higher prices of food articles, including milk, cereals, tea, edible oils and some manufactured items like soaps and detergents.

At 11.41 per cent, inflation breached the 11.11 per cent hit on 6 May 1995, but was still below the 16.9 per cent recorded in March that year.

"High oil prices, strong input costs and a depreciating rupee continue to exacerbate inflationary and other pressures. High interest rates, along with a slowing global economy, will trim GDP growth to 7.8 per cent in 2008-09," rating agency Standard & Poor's and its Indian subsidiary Crisil said in a statement.

Investment bank Goldman Sachs, however, said the RBI rate hike may not have a large negative impact on growth although there are downside risks to GDP growth forecast of 7.8 per cent in 2008-09.

The inflation rate stood at 4.13 in the corresponding week a year ago.

During the week, the prices of tea went up by three per cent, milk by one per cent, sunflower oil by four per cent, vanaspati by two per cent and imported edible oil, salt and mustard oil by one per cent each.

Items of daily use like soaps became expensive by eight per cent, detergents by nine per cent and hair oil by one per cent.

Fuels and lubricants became dearer by 19 per cent, while prices of steel products like wire ropes and steel wire shot up by 36 and 25 per cent, respectively.

Finance minister P Chidambaram expects double-digit inflation to continue for a few more weeks before prices ease and inflation rate comes down.

Galloping inflation may further prompt government and Reserve Bank to take steps to tame price rise. This may worsen the situation, say analysts.