US core inflation change the lowest in two years

The US measure of consumer price inflation rose 1.8 per cent in the year to June, significantly above expectations of a 1.5 per cent increase and the 1.4 per cent from the month before (release).

Month-on-month, the consumer price index (CPI) increased 0.5 per cent, largely down to petrol prices. The food index also increased after a fall in May.

Core inflation excluding volatile products like food and fuel rose 1.6 per cent year-on-year in June - the smallest annual change since June 2011 - and 0.2 per cent month-on-month. The monthly figure was mainly driven up by shelter, medical care and clothing, while downward pressure came from air travel, used vehicles and recreation.

The US data follows reports of 2.9 per cent inflation in the UK and 1.6 per cent in the eurozone.