WASHINGTON, March 23: US consumer prices rose a surprisingly large 0.4 per cent in February; data showed on Wednesday, fraying investors’ nerves still further a day after the Federal Reserve issued a strong warning on inflation. Surging energy prices fuelled the inflation figure last month, the Labour Department said. The core CPI rate, which excludes volatile food and energy costs, rose 0.3pc in the month.

The markets had been expecting the headline figure to go up 0.3 per cent and the core rate to rise by 0.2 per cent.

The CPI is now up 3.0 per cent in the past year, while the core rate has risen 2.4 per cent, the biggest gain since August 2002. The figures came a day after the Federal Reserve shocked Wall Street with strong language on inflation as it raised interest rates by 25 basis points to 2.75 per cent.—AFP