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Last Updated: Friday, 20 February, 2004, 15:46 GMT
Energy costs drive up US prices
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Rising energy costs pushed US consumer prices up in January at their fastest clip in almost a year.

The 0.5% increase in the Department of Labour's consumer price index (CPI) was more than economists had expected.

The culprit, the government said, was a 4.7% rise in energy costs as oil supplies tightened.

But the core CPI - which strips out volatile energy and food prices - was up just 0.2%, reassuring observers that interest rises remain some way off.

Rising inflation is usually the trigger for a boost to interest rates, in an attempt to take the economy off the boil.

The 12-month CPI figure remains at the 1.1% level seen in December, the lowest reading in almost four decades.

Quotas

The soaring cost of fuel oil and petrol accompanies a brutal cold snap in January across much of the US.

Petrol leapt 8.1% in price during the month, and transportation costs in general rose 1.7% despite falling car prices.

Since then, oil cartel Opec has decided to try to keep production within tight limits, cutting back on rampant quota-busting.

Worries about supply - coupled with the slide in the value of the dollar, the currency in which oil is traditionally priced - pushed oil prices to 11-month highs of more than $32 in January.


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