WASHINGTON, June 14: US consumer inflation sped up in May, according to data out on Wednesday that cemented expectations of another hike in interest rates when the Federal Reserve meets this month.

Stoked by a surge in rental values and gasoline, the headline CPI rose 0.4pc in May, the Labour Department said. Basic prices excluding food and energy rose 0.3pc. The month-on-month rise in the headline CPI matched the increase expected on Wall Street, but the core rate outstripped the forecast 0.2pc.

The CPI report was the last inflation indicator to be released before the US central bank’s June 28-29 meeting.

After the producer price index came in surprisingly strong on Tuesday, analysts were betting that the Fed’s 17th hike running was now a done deal.

“The CPI represents continued inflation pressure in the US economy and it makes another rate increase very, very likely,” Lehman Brothers economist Drew Matus said.

“I think they’re going to take preventive measures to make sure that inflation does in fact come down in a few months. That kind of insurance policy is standard operating procedure for the Fed,” he said.—AFP