Iran's inflation rate in the month to June climbed to 15.4 per cent from 14 per cent a month earlier, local media said on Wednesday, quoting Central Bank Governor Mahmoud Bahmani.

"The year-on-year inflation rate in the Iranian month of khordad is 15.4 per cent," the Arman daily quoted Bahmani as saying.

Inflation has risen steadily since hitting a 25-year low of 8.8 per cent in August 2010 and some economists say it could accelerate following government moves to slash subsidies on essentials.

Iran's economy is facing hardship because of sanctions imposed over its disputed nuclear programme, which many countries fear is a cover for building bombs. Iran says its nuclear work is aimed at generating power to meet booming demand.

Iran started to phase out subsidies on food and fuel in December 2010. The price of gasoline rose seven-fold overnight when the cuts were made. Electricity, gas, water and food have also shown sharp rises.

President Mahmoud Ahmadinejad has denied the policy will fuel inflation and lead to economic hardship and says poorer Iranians will be net beneficiaries thanks to direct subsidy payments. 

Many Iranians believe real inflation is much higher than the official figure and some clerics and lawmakers have accused the government of providing false figures.

"The country's inflation and high prices are due to some officials lack of know-how," the Arman daily quoted Grand Ayatollah Lotfollah Safi Golpaygani as saying on Wednesday. – Reuters