Higher petrol prices pushed the inflation rate further above target in September, data showed yesterday, but the rise was less than expected and calmed some concerns that inflation will accelerate further.

The Office for National Statistics said that consumer prices rose 0.2 per cent on the month, pushing up the annual rate to 2.5 per cent, up from 2.4 per cent in August and the highest rate since comparable records began in 1997.

While that was the third consecutive month that inflation has been above the Bank of England's two per cent target, it was lower than the 2.7 per cent that analysts had predicted.

Short sterling interest rate futures rallied on the figures while the pound fell one-fifth of a cent against the dollar on the perception that inflation may be less of a barrier to a possible Bank of England interest rate cut in coming months.

"Some of the concerns out there about CPI hitting three per cent... at least in the short term look overdone. Unless we get another surge in oil prices, this may well mark the peak," said Ross Walker, economist at RBS Financial Markets.

"At the margin they make a rate cut slightly easier," Mr Walker said, but he added that minutes to the MPC's October policy meeting due today and retail sales data due later this week will be more crucial for the rate outlook.

BoE Deputy Governor Rachel Lomax said that she expected inflation to remain above target in the next few months, even if oil prices don't rise further.

A rise in petrol prices of over 4.6 pence per litre in September compared with a rise of just 0.1 pence a year earlier was to blame for the rise in inflation, the ONS said.

Fuels and lubricants had contributed 0.14 percentage points to the overall rise in CPI.

Downward effects on inflation came from clothing and footwear, particularly women's and children's outerwear, which analysts said chimed with surveys showing retailers still forced to discount prices to lure in shoppers.

"We are seeing relatively subdued increases in clothing, furniture and food prices which imply core inflation pressures remain relatively muted," said Philip Shaw, chief economist at Investec in London.