NEW DELHI: India’s inflation accelerated to a three-month high in March, data showed on Tuesday, dashing hopes of interest rate cuts to revive a sputtering economy.

The data was released in the midst of voting in India’s multi-phase election that a new poll suggests will be handily won by the right-wing Hindu nationalist opposition and its allies, who are running on a platform of rebuilding Asia’s third-largest economy.

The Wholesale Price Index (WPI), India’s closest-watched cost of living monitor, jumped by nearly a percentage point from the previous month to hit a year-on-year rate of 5.7 per cent in March, outstripping market forecasts of a 5.3pc reading.

Inflation is a hugely sensitive political issue in India and the Congress government, fearing a voter backlash, has been desperate to curtail price rises which cause huge suffering for the nation’s hundreds of millions of poor by eroding their buying power.

The numbers came as an opinion poll by India’s NDTV suggested the Hindu nationalist Bharatiya Janata Party (BJP) would win a clear parliamentary majority amid voter anger about spiralling prices, the weak economy and a string of corruption scandals.

Congress, the poll suggested, would hit an all-time low when election results are released May 16.

The inflation numbers reversed a declining trend that had fanned hope the central bank might be winning its war on the rising cost of living.

The inflation climb means “any previously small chance of a near-term rate cut is now off the table”, said Glenn Levine, economist at Moody’s Analytics.

Investment house Bank of America-Merrill Lynch said it does not expect a rate cut until next March.

Despite pleas from business to lower interest rates, the Reserve Bank of India (RBI) insists monetary policy must remain tight to tame inflation and ensure long-term growth.

The RBI has raised its key lending rate three times since last September.

It now stands at 8pc. March inflation, the highest since December, was spurred by across-the-board price increases in food, fuel and manu­facturing. Rice was 12.6pc costlier than a year earlier, vegetables were up 8.6pc while fuel was 11pc more expensive.

The BJP, led by conservative Narendra Modi, has promised creation of a price “stabilisation” fund to combat inflation and special courts to try hoarders accused of driving up prices.

India is gripped by what many economists describe as “stagflation” — elevated inflation and sluggish expansion.

For two years the economy has been growing at below 5pc, half the near double-digit levels of India’s boom years that economists say are needed to create jobs for the nation’s vast young population.

Separate figures showed consumer price inflation (CPI), compiled from a smaller goods basket than the benchmark WPI, jumped to 8.31pc in March from a year earlier from 8.1pc in February.

CPI now is also being closely tracked by the central bank.

The inflation spurt followed figures last week showing industrial production slid by an unexpected 1.9pc in February from a year earlier.

The disappointing data underlines the huge challenges facing the next government in restoring growth.

Inflation could rise further if El Nino strikes, say economists, warning the weather phenomenon could wreak havoc with the annual monsoon rains and damage summer crops. El Nino has in the past led to both devastating floods and droughts in India.

“Indian inflation will prove stubborn from here,” said Miguel Chanco, analyst at Capital Economics, “even when monetary easing does begin, we think rate cuts are unlikely to be aggressive.”