A woman with an umbrella walks through the Myeongdong shopping district in Seoul, South Korea, on Jan 26, 2021. (PHOTO / FILE / AFP)

SEOUL - South Korea's annual consumer inflation accelerated to 3.4 percent in August while the month-on-month rate was the fastest since early 2017, which should keep policymakers on alert for any sustained uptick in prices.

The Bank of Korea last month held interest rates steady for a fifth straight meeting, as it continued to prioritize price stabilization amid heightened growth risks.

On a monthly basis, the consumer price index rose 1.0 percent in August in South Korea, after gaining 0.1 percent in the prior month, official data showed on Tuesday, beating economists' median forecast for a 0.3 percent rise in a Reuters survey

On a monthly basis, the consumer price index rose 1.0 percent in August, after gaining 0.1 percent in the prior month, official data showed on Tuesday, beating economists' median forecast for a 0.3 percent rise in a Reuters survey.

Annual inflation, which accelerated for the first time in seven months, also topped the 2.7 percent expected by economists, and marked the quickest since April. It followed a 2.3 percent rise in July, which was the slowest in 2 years.

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The BOK has said consumer inflation is likely to accelerate to around 3 percent in August and September, before easing again, meaning the latest figures should not come as a surprise to policymakers.

Commenting on the data, the finance ministry said the inflation rate was affected by temporary factors such as adverse weather conditions, along with a rise in global energy prices, but that the overall slowing trend in prices was maintained.

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Broken down by sector, prices of petroleum products jumped 8.1 percent over the month, agricultural prices surged 10.5 percent, while public service prices climbed 0.5 percent.

Core CPI, which excludes volatile food and energy prices, rose 3.3 percent on an annual basis, unchanged from the previous month.