Industrial output growth slowed sharply in September while the annual gain in wholesale prices eased a little in October. The Reserve Bank (RBI) has already made it clear that policy rates will almost certainly remain unchanged for the next three months and we continue to expect that one more hike of 25bp in mid-March will mark the peak for the tightening cycle. Nevertheless, the RBI is also becoming increasingly concerned about the threat of asset bubbles. There is a growing risk that the RBI will be forced to lift interest rates further, and into restrictive territory, during the course of 2011.