Stateside prices are accelerating at the fastest pace in over 40 years, strengthening the case for the US Federal Reserve to front load reining in policy.
Inflation in the US scaled to 7.9 per cent, according to data released by the US Bureau of Labor Statistics today, the hottest rate since January 1982.
The fresh data reinforces predictions that US Fed Chairman Jerome Powell and co are about to launch one of its quickest tightening cycles in recent history, with some economists betting the Fed could hike rates 50 basis at its meeting next Wednesday.
British inflation tends to follow US inflation, indicating the cost of living is set to tighten even more in the UK.
Surging energy prices triggered by Russia invading Ukraine are set to push inflation in the US even higher in the coming months, pinching Americans’ wallets hard.
Paul Ashworth, chief North America economist at Capital Economics, said gasoline prices may rise as much as 20 per cent this month.
“The most recent post-invasion surge in agricultural crop prices means food prices are headed even higher in the near term,” Ashworth added.
Russia and Ukraine represent an enormous share of the world’s grain production, meaning disruption to global trade flows as a result of the conflict will likely put upward pressure on food prices.