Swelling food and energy costs lift US inflation

A jump in food prices and energy costs drove inflation in America to a fiery clip in September, testing Fed chair Jerome Powell’s insistence that price rises are transitory.

On an annual basis, US inflation hit 5.4 per cent last month, according to the Labor Department.

Higher prices for food, which rose 4.6 per cent, and energy, which rocketed 24.8 per cent, mainly generated elevated inflation.

Powell, and other central bank chiefs, have doubled down on bets the current spike in inflation spreading across developed economies will not last.

Inflationary pressures have been fuelled by supply chains buckling under the weight of a resurgence in demand as economies emerge from Covid-19 restrictions.

Jai Malhi, global market strategist at J.P. Morgan Asset Management, said: “Both the Fed and the market are likely to accept that a tight labour market and the persistence of inflation all but confirms that easing off the accelerator is now the right thing to do.”