ISTANBUL: Turkey's annual inflation jumped to a 20-year high of 48.69% in January, a bit more than expected according to data on Thursday, fuelled by a series of unorthodox interest rate cuts and a crash in the lira currency late last year.

Month-on-month, consumer prices rose 11.1%, the Turkish Statistical Institute said, compared to a Reuters poll forecast of 9.8% and an annual forecast of 46.7%.

The producer price index soared 10.45% month-on-month in January for an annual rise of 93.53%, in a reflection of the foreign exchange-related turmoil in recent months.

The lira shed 44% of its value last year as the central bank slashed interest rates by 500 basis points, under a drive by President Tayyip Erdogan to prioritise credit and exports despite the double-digit price rises.

BoE expected to raise rates further to combat inflation

Partly in response to the currency turmoil, Turkey raised a series of administered prices this year including for gas, electricity, road tolls and bus fares, adding to inflationary pressure. The monthly minimum wage was hiked 50%.

Last month's inflation was driven by transport prices, which soared 68.9% year-on-year, while the heavily-weighted food and drinks prices jumped 55.6%, eating deeper into household earnings and savings.

The lira was trading at 13.5420 against the dollar after the data, some 0.4% weaker than its close on Wednesday.