US inflation jumps to 3.8% as energy costs surge from Iran war

US prices rose in April at their fastest rate since May 2023 as the impact of the war in Iran was increasingly felt by consumers.A jump in the cost of gasoline and groceries pushed the consumer price index (CPI), showing the rate prices rose by in the past 12 months, to 3.8%.It is the highest level since inflation hit 4% three years ago.The Bureau of Labor Statistics (BLS) said almost half of the rise was driven by surging energy costs, while housing and food costs also contributed.The Iran" class="entity-link entity-event" data-entity-id="121016" data-entity-type="event">US-Israel war in Iran, and the resulting effective closure of the key Strait of Hormuz shipping lane, has led to a jump in oil prices and this has caused a surge in the price of gas in the US. The national average price for a gallon of unleaded is at its highest level since July 2022, at $4.50 (£3.33), according to data from the AAA motoring group.The rise in April's inflation figure, from 3.3% in March, makes it increasingly unlikely the Federal Reserve will cut interest rates this year.Isaac Stell, investment manager at the Wealth Club, said the inflation increase even left possible interest rate hikes "firmly on the table".