(Nov 3): Turkish inflation accelerated slightly in October, raising questions about the possibility of another interest-rate cut before the end of the year.

Annual consumer price growth picked up to 29.8% from 29.7% in September, TurkStat said on Tuesday. The median estimate in a Bloomberg survey of 22 analysts was 29.5%.

Monthly price growth was 2.58%, quickening from 1.84% the previous month and coming in above the median analyst forecast of 2.40%. Clothing, shoe, food and non-alcoholic-beverage prices were among the biggest contributors to the monthly rise.

The central bank cut its benchmark interest rate by 100 basis points to 36% in October, its first reduction since January, citing subdued demand and slowing economic activity. The latest inflation print may complicate economists’ forecast of another 100-basis-point cut during the year’s final rate-setting meeting on Dec 10, though the central bank will be able to assess November inflation ahead of the decision.

Turkish stocks and bonds fell following the inflation data. The yield on two-year and 10-year bonds rose by eight basis points and six basis points, respectively. The Borsa Istanbul 100 Index fell as much as 1%, led by a decline in bank stocks.

The lira was little changed, trading at close to 50 per US dollar.

Policymakers last month said they expected headline inflation to keep slowing despite a pickup in the seasonally adjusted cost of services. Governor Fatih Karahan will present the central bank’s latest projections in Istanbul on Nov 12.

Inflation risks “are heavily tilted to the upside", Bloomberg Economics’ Selva Bahar Baziki wrote in advance of the data. “A sustained escalation in the Middle East could derail the expected decline in inflation.”

“Renewed Middle East conflict could also exacerbate the currency weakness triggered by the recent fund rout, adding to price pressures,” she added.

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