Russia's annual inflation crept back above the central bank's 4% target in the week to July 24 for the first time since late March, the economy ministry said on Wednesday.

The Bank of Russia raised the cost of borrowing for the first time in more than a year last week, hiking to 8.5% as the weak rouble added to inflationary pressure from a tight labour market and strong consumer demand.

The high base effect of last year's double-digit price rises saw annual inflation drop below the central bank's target in recent months, and although it has warned that inflation will rise, returning above the 4% mark is a symbolic blow for Moscow.

CentroCreditBank Economist Yevgeny Suvorov warned before last week's larger-than-expected rate hike that Russia was on the brink of a major inflationary catastrophe.

The central bank raised its year-end inflation forecast to 5.0-6.5% from 4.5-6.5% on Friday. The bank intends to bring annual inflation back to 4% in 2024.

(Reporting by Alexander Marrow and Darya Korsunskaya; Editing by Toby Chopra)