But it rose 6.7 per cent compared to a year ago, after gaining 6.4 per cent in August, due mainly to higher costs of housing and food, said the Department of Statistics on Thursday.

Housing costs climbed an annual 14.6 per cent on higher electricity tariffs and rents, the statistics department said, but analysts expect this to ease as the real estate sector cools amid the global economic slowdown.

Singapore consumers paid 8.2 per cent more for food, 2.8 per cent more for transportation and communication, 4.8 per cent more for healthcare and 3.7 per cent more for recreation.

On a seasonally adjusted basis, September CPI was 0.1 per cent higher than in August.

Prices were unchanged from August, without adjusting for seasonal factors.

The average inflation rate for the first nine months of 2008 was 6.9 per cent, compared with the same period the year before, the department said.

The Monetary Authority of Singapore this month ended a policy favouring gains in its currency in an effort to support the economy, as inflation eased from a 26-year high.

Central banks around the world are loosening monetary policy and cutting interest rates as a worsening global credit crisis saps growth.

'Inflation remains elevated and prices aren't going down as fast as expected,' Alvin Liew, an economist at Standard Chartered Plc in Singapore told Bloomberg news.

'The change in Singapore's currency policy may increase inflationary pressures from imported goods. A more significant decline may come only next year.'

Singapore's inflation may 'revert back' to between 2 per cent and 3 per cent in the next 15 months, Trade and Industry Minister Lim Hng Kiang told Parliament earlier this week.

The central bank expects consumer prices to rise between 6 per cent and 7 per cent this year, the biggest gain since 1981.

Singapore's central bank, which relies on the currency rather than interest rates to contain inflation, said Oct 10 it's shifting to a 'zero-per cent appreciation' stance, a reversal of its policy six months earlier when it called for faster exchange-rate gains to damp higher prices.

The Singapore dollar is down 4.5 per cent this month.