The Reserve Bank of India is “in a bind”, given the present situation of inflation heating to above the mandated band and weakening growth, a British brokerage said on Tuesday. It may hike the repo rate only by the first quarter of next fiscal (April-June 2022) and continue to maintain the accommodative stance in the interim, Barclays’ chief India economist Rahul Bajoria said in a note.

Ineffectiveness of the government’s supply-side measures, an un-anchoring of inflation expectations leading to a wage-price spiral, and a return of pricing power are some of the key triggers that could force the RBI into rate action earlier than expected, he said. Retail inflation based on consumer price index (CPI) had spiked to 6.3 per cent in May.