The Consumer Prices Index was last at 3% in April 2012, but has been driven higher by increases in transport and food prices.

The increase in inflation raises the likelihood of an increase in interest rates next month.

The figures are significant because state pension payments from April 2018 will rise in line with September's CPI.

Business rates will go up by September's Retail Prices Index of 3.9%.

The fall in the pound since last year's Brexit vote has helped to push up inflation.

The basic state pension is protected by the "triple lock" guarantee which means it will go up next April by a rate equal to September 2017's CPI, earnings growth or 2.5% whichever is the greatest.

However, Chancellor Philip Hammond could amend that in next month's Budget.

At the moment, the full new state pension is £159.55 per week, equivalent to £8,296.60 per year.

Bank of England, Mark Carney, has narrowly avoided having to write a letter to the chancellor, only necessary if inflation reaches more than 1% either side of the 2% target.

ONS Head of Inflation Mike Prestwood said: "Food prices and a range of transport costs helped to push up inflation in September. These effects were partly offset by clothing prices that rose less strongly than this time last year."

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The tick upwards in inflation will increase expectations of a rate rise from the Bank of England later on this year, stoked by a flurry of hawkish rhetoric coming from Threadneedle Street."

However, he added, it is not a foregone conclusion, "so it's probably best not to count those chickens until they're hatched".

(Published by BBC - October 17, 2017)