The US Labor Department said that consumer prices climbed a higher-than-expected 2.7pc in March from a year before.
Almost three quarters of the rise was due to surging food and petrol prices, with petrol costs climbing 5.6pc, the ninth straight month of increases. Food rose 0.8pc in March, the largest gain since July 2008.
A survey of 41 economists by Bloomberg had on average expected annual inflation to hit 2.6pc.
David Wyss, the New York-based chief economist at Standard & Poors, said the inflation was largely as expected, adding: “The Fed is not going to see inflation as a threat so they have the freedom to keep interest rates low longer. But core inflation is creeping up from its lows six months ago, so the Fed is going to end its extraordinary measures. There will be no QE3 [a third round of quantitative easing].”
The consumer price index’s monthly rise was 0.5pc, in line with economists’ expectations, the ninth consecutive increase. Core prices – those used by the Federal Reserve to gear policy, and excluding food and fuel costs – rose just 0.1pc, less than had been forecast.
The announcement came after data showed that inflation in China had jumped to a 32-month high, with food prices also proving a major driver for the US’s second-biggest trade partner, climbing 11.7pc in the year to March.
Eurozone inflation has hit 2.7pc and is above 3pc once Britain and the rest of the EU are included, raising expectations of sharper interest rates rises. Eurostat, the European statistics office, attributed the biggest upward pressure to fuel prices.
The sets of data were released amid burgeoning criticism of the Federal Reserve’s stimulus programme both at home and abroad for driving global prices higher.
The president of the Federal Bank of Richmond said on Thursday that the “quantitative easing” programme should be curbed to prevent prices rising too much, and Russian finance minister Alexei Kudrin said on April 5 that it fuels inflation in emerging markets.
Last week the European Central Bank raised its benchmark interest rate for the first time since July 2008 in an effort to tackle inflation fears, pushing it 25 basis points higher to 1.25pc.
The Bank of England resisted the urge to follow suit earlier this week, maintaining interest rates at 0.5pc as British consumer inflation slowed in March, declined to 4pc from 4.4pc the previous month. Many have predicted that the Monetary Policy Committee will wait until August before increasing rates.
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- Interest rates ‘to quadruple in a year’, warns Bank of England policymaker Andrew Sentance
- Martin Weale says Bank of England ready to pump more into economy