A Reuters report said the consumer price index rose 0.3 percent from a month earlier, driven by higher transport costs, leaving the year-on-year inflation rate on the Indian Ocean Island at 2.6 percent.

The central bank governor told Reuters in July that while inflation was at historical lows the trend was upwards and the rate could reach 3-4 percent by the end of the year.

The CSO report showed that transport costs leapt 2.4 percent in August from a month earlier, health costs were up 1.1 percent and prices at restaurants and hotels rose 0.9 percent from July.

The consumer price index rose to 120.6 in August from 120.2 in July and 117.5 a year earlier.

The CSO said petrol prices had the biggest impact, contributing 0.3 of a point to the index rise, followed by motor vehicles and other goods and services, both on 0.2 of a point. The cost of rice, fruit, mortgages and diesel fell.