Amid reports that international crude oil prices may increase upto 170 dollar a barrel, industry body Assocham said that inflation may touch 14.5 per cent by the end of this year.

It said that the trickle down impact of hiked fuel prices will spill over to other commodities by the month of December.

Coupled with the low-base effect, inflation would peak to 14-14.5 per cent level, which could lead to further tightening of monetary policy pushing the already high interest rates to an upper level, Assocham said in its study, 'Inflation and Interest Rates'.

The report further said if the lending rates go up by another 50-100 basis points, non-food credit offtake may come down to 19-20 per cent in the present financial year and home loan growth may dip by 5-7 per cent.

Despite the increase in deposit rates, effected since July, and negative sentiment in the equity markets, the current inflation may reduce the deposit growth to 20 per cent in 2008-09, the study added.

Home loans have suffered a double whammy of increasing interest rates and high property prices and with the upward revision, home loan rates and interest rates have almost doubled in the past four years, the chamber said.

The price rise, measured by the Wholesale Price Index, shot up well past the double digit figure on 7 June, when it touched 11.05 per cent and has remained unabated touching a 13-year high of 11.63 per cent for week ended on 21 June, despite the government and Reserve Bank's steps to cool the demand for commodities and increased supplies.

The interest rate on fixed-rate home loan charged by few of the players is more than 14 per cent and property prices, on the other hand, registered a 50-100 per cent increase in 2007-08 alone.

Though real estate prices have softened in some areas, the affordability has not improved as the prices are still high and interest rates have been increasing relentlessly.

Thus, expectation of further corrections and higher interest rates would keep the demand of home loans low in the current fiscal, it said.

The price rise, measured by the Wholesale Price Index, shot up well past the double digit figure on 7th June, when it touched 11.05 per cent.

It has remained unabated touching a 13-year high of 11.63 per cent for the week ended 21st June despite the government and Reserve Bank's steps to cool it down.