US consumer prices rose by a surprisingly large 0.4% in February, with surging energy prices fuelling headline inflation.
The Labor Department said that the core rate, which excludes volatile food and energy costs, rose by 0.3% in the month.
The markets had been expecting the headline figure to go up 0.3% and the core rate to rise by 0.2%. The figures came a day after the Federal Reserve shocked Wall Street with a tough warning on inflation as it raised interest rates by 0.25 points to 2.75%.
The annual inflation rate is now 3%, while the core rate is 2.4%, its highest level since August 2002.
