US inflation slowed in July as consumer price index growth dropped to 0.1 per cent.
This latest inflation figure compares to a 0.3 per cent rise in CPI for June and brings the annualised rate down to 2 per cent from 2.1 per cent for the previous month.
Data released today by the Labor Department reveals that the rise in inflation for July is the slowest increase recorded since February 2014.
Shelter and food prices rose during the month of July, according to the Labor Department, but this was offset by declines in energy prices and airline fairs.
Figures released separately today by the Office of National Statistics also show a fall in UK inflation to 1.6 per cent in the year to July compared to 1.9 per cent for the previous month.
Capital Economics senior US economist Paul Dales says: “The recent softening in US core consumer prices eases some of the pressure on the Fed to start considering rate hikes, although in our view only temporarily.
“We believe that a further decline in the amount of spare capacity will push core CPI inflation (and more importantly the personal consumption expenditure measure) above 2 per cent early next year. This will play a role in prompting the Fed to raise interest rates in March.”