Iran's annual inflation rose to 26.4 per cent last month, an Iranian news agency cited central bank figures as showing, as consumer prices continued to climb steadily in the world's fourth-largest oil exporter.

Rising inflation is expected to be a key issue for voters in next year's presidential election, with President Mahmoud Ahmadinejad facing growing criticism from MPs, the public and the media over his government's failure to rein in price hikes.

The Mehr News Agency on Thursday quoted the central bank as saying consumer prices rose by 2.2pc in the Iranian month that ended on June 20 compared with the previous month, when the year-on-year rate reached 25.3pc.

Compared with the same month last year, prices rose 26.4pc this month, it said.

Ahmadinejad came to power in 2005 on a pledge to share out Iran's oil wealth more fairly but the conservative president has come under fire over his economic policies.

Analysts say the profligate spending of an influx of petrodollars combined with interest rates well below inflation are factors fuelling inflation.

A London-based economist said the latest inflation figure was no surprise. He blamed loose fiscal and monetary polices while saying rising global food and other prices added to the problem.

'External factors have made it inflationworse but it is home-grown,' said the economist.

Conservatives retained their clear parliamentary majority in a March election but analysts expect the assembly to become increasingly critical of Ahmadinejad's economic management ahead of next year's vote, when he is expected to stand for re-election.

The president has dismissed the criticism arguing rising inflation is a global problem and saying his government is tackling the issue.

Iran has reaped windfall gains in recent years from record world oil prices and says its economy grows by more than 6pc annually, despite tightening international sanctions over nuclear work the West fears is aimed at making bombs.

Analysts, however, say the nuclear standoff is making foreign firms more wary of investing in the Islamic Republic.