Fuel pushes up US inflation rate

US inflation rose faster than expected in May, as higher petrol costs hit consumer prices.

The month-on-month rise was 0.7%, the Labor Department said, up from 0.4% in April. Core inflation, which does not include food and energy, added 0.1%.

The figures showed that most prices were largely being contained and would not prompt a change in interest rates, analysts said.

The Federal Reserve has kept rates unchanged at 5.25% for twelve months.

"This number does not change anything for the Fed," said Robert Macintosh of Eaton Vance Management.

"We have been seeing good core numbers and this continues that."

He added: "Given all the angst we have had in the bond market the last two weeks I don't see how one number like this is going to make the sentiment change."

Oil bill

Separately the Commerce Department said that the current account deficit - the most commonly used measure of foreign trade - had grown to $192.6bn (£97.5bn) in the first three months of 2007, from $187.6bn in the October-December period last year.

A larger oil bill was blamed for the rise - though the deficit was smaller than analysts had expected.

According to the Labor Department food prices rose 0.3%, and energy added 5.4% - more than double the gains in April.

Over the past year, consumer prices have risen 2.7% and core prices up 2.2%.