A vegetable vendor waits for customers at her stall in a women-led street market in Diyarbakir, Turkey December 22, 2021. Picture taken December 22, 2021. REUTERS/Sertac Kayar

ANKARA (Reuters) -Turkey's annual inflation rate jumped to 33.29% in September, well above expectations, according to data on Friday, reinforcing concerns that the central bank may need to slow its monetary easing cycle to address stubborn price pressures.

Consumer price inflation was driven by sharp increases in food, housing and education prices, the Turkish Statistical Institute data showed. Last month marked the first rise in the annual rate since a peak of 75.4% touched in May last year.

Monthly inflation in September stood at 3.23%, exceeding the 2.6% forecast in a Reuters poll, which had also forecast the annual rate to dip to 32.5%.

In August, monthly inflation was 2.04% while the annual rate was 32.95%.

CENTRAL BANK MAY SLOW PACE OF MONETARY EASING

The central bank cut rates by 250 basis points to 40.5% last month and has signalled it may slow the pace depending on inflation dynamics. That rate cut, and its 300-point cut in July, were a bit more aggressive than analysts had expected.

"I am afraid the data suggest the (central bank) was wrong to cut hard and early and they have lost some of their hard rebuilt credibility now," Tim Ash at BlueBay Asset Management said on X.

Capital Economics said in a note the data "may provide some cause for caution at the central bank" but it also predicted another 250-point cut this month.

The lira held steady at a record low 41.685 to the dollar after the data. Bank stocks dipped.

Annual CPI in September was pushed up by a 36.1% rise in prices of food and non-alcoholic drinks and a 51.4% rise in housing, the two categories with the highest weighting.

On a monthly basis, food and drinks prices shot up 4.6% while the education category soared by 17.9%, the data showed.

The domestic producer price index rose 2.52% month-on-month in September for an annual rise of 26.59%, it showed.

The central bank returned to an easing cycle in July after having reversed course temporarily due to a market selloff in March over the jailing of Istanbul Mayor Ekrem Imamoglu, the main political rival of President Tayyip Erdogan.

Ahead of the CPI data, Morgan Stanley had said that, barring significant upside surprises, it expected the central bank to continue rate cuts but to reduce their size to 200 basis points this month.

(Reporting by Ece Toksabay; Editing by Jonathan Spicer and Gareth Jones)