US Fed chief warns of continued inflation

July 17th, 2008 - 1:28 am ICT by IANS  

Washington, July 16 (DPA) US central bank chief Ben Bernanke warned Wednesday that inflation could continue to increase in the near term, as government figures showed rocketing petrol prices had pushed inflation in June to the largest monthly increase since 2005. The Consumer Price Index increased to a seasonally adjusted 1.1 percent in June from 0.6 percent the previous month, the US Labour Department said Wednesday.

“With gasoline and other consumer energy prices rising in recent weeks, inflation seems likely to move temporarily higher in the near term,” Bernanke told the a finance committee in the US House of Representatives.

Soaring energy prices made up two-thirds of the June increase, with the energy index rising 6.6 percent from a 4.4 percent increase in May. Food prices rose 0.8 percent, while core prices, which exclude food and energy, were up 0.3 percent.

Bernanke stressed that the inflationary pressures of fuel and food had yet to spill over into other areas, but noted businesses could begin to pass along more of those costs to consumers.

His testimony came a day after he addressed a similar Senate committee, warning that the US economic outlook was “uncertain”.

Consumer prices were up 5 percent from June 2007, the highest such increase since May 1991, compared to a 4.2 percent gain in May.

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