U.S. producer prices fell in March for the first time in seven months, weighed down by a drop in the cost of services and energy products, but the largest annual increase in five years suggested inflation was rising.
U.S. import prices recorded their biggest drop in seven months in March as the cost of petroleum declined, but the underlying trend pointed to a moderate rise in imported inflation as the dollar's rally fades.
U.S. consumer spending barely rose in February amid delays in the payment of income tax refunds, but the biggest annual increase in inflation in nearly five years supported expectations of further interest rate hikes this year.
The 2.3% UK inflation level superseding average earnings which currently stand at 2.2%, consumer spending may be negatively impacted and such could trigger fears over the sustainability of the UK’s consumer fueled economic growth.
The U.S. Federal Reserve raised interest rates on Wednesday for the second time in three months, a move spurred by steady economic growth, strong job gains and confidence that inflation is rising to the central bank's target.