INFLATION last night stood at its highest level since June after figures for last month showed the annual rate rose by 0.3 per cent to 1.5 per cent.

Faster growth in transport and energy costs fuelled the surprise increase, which brings the rate closer to the Government's target of two per cent.

Air fares were the main driver behind transport inflation, while higher fuel costs and petrol prices also had an impact, the Office for National Statistics said.

Energy bills grew faster due to significant increases in gas and electricity tariffs by major suppliers in September.