Indian inflation at five-year low

Rising income in India has helped the economy grow

Inflation in the fast-growing Indian economy fell to a five-year low at the beginning of this month, helped by lower food prices.

India's wholesale price index rose 3.06% in the 12 months to 6 October - its lowest level since 19 October 2002.

The figure was sharply below the country's central bank target of 5% for the year to April 2008 and paves the way for pause in interest rate rises.

Five rate rises over the past year will cool economic growth, analysts predict.

However, with surging oil prices and the high price of metal, the threat of inflation had not gone away, observers said.

The central bank is not expected to change rates when it next meets at the end of the month.

The wholesale price index is more closely watched than India's consumer price index because it covers more products and is published weekly.