US INFLATION HOLDS AT 3.4% AS FUEL PRICES SURGE

Prices in the United States rose by 3.4% in the year to August, according to official figures from the Bureau of Labour Statistics. The overall inflation rate remained unchanged from July. Higher petrol prices drove the increase in the cost of living, with a gallon of diesel reaching an average of more than $6 on Friday, described as a new all-time high.

The spike in fuel costs has been attributed to higher global oil prices, which the source links to supply disruptions resulting from the US-Iran war. Diesel prices rising above $6 per gallon marks the first time the fuel has reached that threshold. The surge in energy costs comes during the approach of peak demand season for diesel.

The Federal Reserve is expected to make its latest interest rate decision next week, with growing expectations the central bank will increase rates in an attempt to slow inflation. US household budgets have come under mounting pressure from the rising cost of living, particularly at fuel pumps. The timing of the rate decision comes as energy-driven inflation presents a significant challenge to consumer spending.