Pressure on Fed to raise interest rates as US inflation surges to 30-year high

Pressure on America’s central bank to raise interest rates has intensified after rising energy costs, supply shortages and increased consumer sent US inflation surging to a level not seen for more than 30 years.

Although the Federal Reserve has repeatedly insisted price pressures will prove “transitory”, financial markets were taken aback by a 6.2% increase in the cost of living in the world’s biggest economy over the past year.

A labour department report released on Wednesday showed prices rose by 0.9% in October alone – more than double the 0.4% jump in September – to push the annual rate of inflation to its highest level since December 1990, a time when global oil prices had risen sharply due to the Iraqi invasion of Kuwait.