WASHINGTON: US consumer prices hit a new 40-year high last month as the world’s largest economy continued to be battered by a surge of inflation, which the fallout from Russia’s invasion of Ukraine is expected to worsen.

The consumer price index (CPI) was 7.9 per cent higher in February compared to the same month last year, its biggest jump since January 1982 as costs for gasoline, food and housing rose, the Labour Department said on Thursday.

The Federal Reserve is expected to increase interest rates next week for the first time since the pandemic began to fight the price increases that have marred the recovery from Covid-19. But analysts warn of another shock to come from the sanctions imposed on Russia, a major producer of oil and gas.

“The Russia-Ukraine war adds further fuel to the blazing rate of inflation via higher energy, food and core commodity prices that are turbo charged by a worsening in supply chain problems,” Kathy Bostjancic of Oxford Economics said.

The inflation spike has proven to be a liability for President Joe Biden, who has already seen his approval ratings sink as price rose throughout 2021.

In a statement after Thursday’s inflation figures came out, Biden warned of the impacts of “Putin’s price hike” and acknowledged “there will be costs at home.”

“But Americans can know this: the costs we are imposing on Putin and his cronies are far more devastating than the costs we are facing,” Biden said.

With the US economy set to face both higher interest rates thanks to the Fed and rising fuel costs due to the war in Ukraine, Rubeela Farooqi of High Frequency Economics said consumption could suffer.

Published in Dawn, March 11th, 2022