Turkey’s official inflation rate exceeded 80 per cent for the first time since 1998 in August as policymakers insisted that runaway price increases would soon begin to slow.

The consumer price index increased at an annual rate of 80.2 per cent last month, according to data published by the government statistics agency — the highest level since President Recep Tayyip Erdo?an took power almost two decades ago. The figure was up from a rate of 79.6 per cent in July.

Turkey has pursued what some economists have termed a giant economic experiment as the Turkish president, a notorious opponent of high interest rates, has insisted on maintaining one of the world’s lowest interest rates in real terms and inflation has soared as a result. With the central bank’s benchmark rate now at 13 per cent after an unexpected rate cut last month, the real cost of borrowing now stands at minus 67 per cent.