Inflation in the US eased last month as the cost of energy and filling up at the pumps fell, official figures show.<\/p>\n
Prices rose 3.5% in the year to June, according to the Bureau of Labor Statistics (BLS), down from 4.2% recorded in May.<\/p>\n
Gasoline prices decreased 9.7% last month, but are still much more expensive than a year ago. On Tuesday, the national average had risen to $3.86 a gallon from $3.79 a week ago, according to motorist advocacy group AAA.<\/p>\n
While the rate of inflation has fallen more than expected, the easing of price rises could be short-lived due to the renewed conflict in the Middle East sending global oil prices up again.<\/p>\n
The price of a barrel of Brent crude, which is the global benchmark for oil, hit $87 on Tuesday, an increase of almost $10 in the space of 24 hours.<\/p>\n
The spike in the price of the commodity came after the fresh military strikes on Iran by the US this week, with President Donald Trump declaring a new naval blockade in the Strait of Hormuz and a 20% charge on all cargo being shipped through the key waterway used for global trade.<\/p>\n
The escalation has already led analysts to predict that inflation will rise in the coming months and that interest rate cuts are unlikely anytime soon.<\/p>\n
“Gasoline prices are already back above June levels, meaning the next inflation report will heat up again,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.<\/p>\n
Ahead of his first address to the US Congress later, newly appointed Federal Reserve chairman Kevin Warsh said his committee had “no tolerance to persistently elevated inflation”.<\/p>\n
“We share a resolute commitment to restoring price stability,” he said in prepared comments.<\/p>\n