Estonia's inflation rate rose in October to a nine-year high as prices of food and housing advanced, reported Bloomberg.

The rate increased to 8.5 percent, the highest since September 1998, from 7.2 percent last month, the Tallinn-based statistics office said on its Web site today. Prices rose 1 percent on the month.

Banks including Nordea Bank AB, the biggest lender in the Nordic region, and Danske Bank A/S warned last month that Estonia, along with neighboring Latvia and Lithuania, faced an increased risk of a ``hard landing'' due to accelerating inflation and widening current account deficits.

The central bank's Vice Governor Marten Ross said this week that a slowdown in wage growth, which reached 21 percent in the second quarter, is essential to ensure slower inflation.

Inflation accelerated for a second month after slowing to 5.7 percent in August. The central bank has forecast that inflation will average 7.4 percent next year, far exceeding the threshold for euro adoption. The Baltic nation had sought to adopt the euro from the beginning of this year and has been forced to delay its plans.