Nov. 5 (Bloomberg) -- Taiwan's inflation probably rose to the highest rate in more than two years in October on rising food and energy costs, increasing the likelihood the central bank will raise interest rates.

Consumer prices climbed 3.26 percent from a year earlier, after rising 3.08 percent in September, according to the median estimate of 10 economists surveyed by Bloomberg News. That would be the fastest pace since August 2005. The state statistics bureau will release the report at about 4 p.m. today in Taipei.

Accelerating inflation may ``force the central bank to raise interest rates again,'' said Sam Chang, a bond trader at Polaris Securities Co. in Taipei, who expects policy makers to raise the benchmark at their next meeting.

Taiwan's central bank policy board meets in the second half of next month to decide on the benchmark interest rate, raised in September for a 13th consecutive quarter to 3.25 percent to combat inflation. Taiwan's dollar is the worst-performing major currency this year, making imports more expensive. Crude oil surpassed $96 a barrel for the first time last week, and food prices surged after a storm damaged crops.

Food accounts for a quarter of Taiwan's consumer price index and fuel makes up almost 13 percent. Economies across Asia are reporting a pickup in prices because of rising fuel and commodity costs, with China's inflation at a 10-year high and Singapore's at the fastest pace in more than 12 years.

``Surging fuel prices as well as an expected rise in fruit and vegetables prices'' fanned inflation in October, said Tony Phoo, an economist at Standard Chartered Bank in Taipei.

The following table shows economists' estimates for changes in consumer prices in October on a non-seasonally adjusted basis from a year earlier:

Taiwan Inflation Forecasts

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                                  CPI
Firm                             YoY%
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Median                          3.26%
Average                         3.31%
High                            4.00%
Low                             3.00%
Number of Estimates                10
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ChinaTrust Commercial Bank      4.00%
DBS Group                       3.00%
Forecast Ltd.                   3.00%
HSBC                            3.20%
ING Groep NV                    3.40%
Lehman Brothers                 3.60%
Mega Securities                 3.35%
Polaris Securities              3.22%
Standard Chartered Bank         3.30%
UBS Securities                  3.00%
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To contact the reporters on this story: James Peng in Taipei at jpeng7@bloomberg.net;

Last Updated: November 4, 2007 11:01 EST