US inflation rises above forecasts; ECB hikes to 4%, hinting at peak

US inflation rises above forecasts; ECB hikes to 4%, hinting at peak

KUWAIT: Driven by rising energy costs, US inflation rose above forecasts in August, likely complicating the Federal Reserve’s battle to keep prices under control. Consumer prices rose by 3.7 percent on a yearly basis, up from 3.2 percent in July and beating consensus forecasts of 3.6 percent. On a monthly basis, prices increased 0.6 percent following a 0.2 percent gain the month prior.

More than half the monthly increase in price pressures were driven by a recent jump in petrol prices after Saudi Arabia and Russia renewed efforts to push oil prices higher. Brent crude was last seen trading at a 10-month high of $92.50. Underlying price pressures were also marginally stronger than expected, but continued to decline year on year, providing the Fed cover to leave interest rates unchanged next Wednesday.

The core figure gained a more modest 0.3 percent m/m, slightly above the 0.2 percent rate for July. However on an annual basis, it fell from 4.7 percent to 4.3 percent. After hiking rates 11 times since March 2022 in an effort to bring inflation back towards its 2 percent target, the Federal Reserve is widely expected to keep interest rates steady at its next meeting on September 19-20. Moving