US inflation rises more than expected in January

US inflation rose more than expected in January as the fall in energy prices eased, the Bureau of Labor Statistics revealed on Friday.

The consumer price index increased 1.4% year-on-year last month, beating analysts’ estimates for 1.3% growth and marking a considerable pick-up from December’s 0.7% gain.

The energy price index fell 6.5% over the past 12 months, the smallest yearly decrease since November 2014, compared to a drop of 2.8% in December. The food index was unchanged in January.

Excluding energy and food, CPI jumped 2.2% year-on-year in January following the previous month's 2.1%. Analysts had pencilled in no change.

The Federal Reserve is taking inflation into consideration in determining the timing of the next change in interest rates. The central bank is targeting 2% inflation.

"The big gains in CPI medical care prices last month point to some upward pressure on core PCE inflation in January," wrote Steve Murphy, US economist at Capital Economics.

"We still think the latter will rebound to the Fed’s target by later this year once the deflationary impact of the stronger dollar fades. Odds of a Fed rate hike in March remain slim but we still think that the Fed will raise interest rates in June, as fears of recession in China and the US and the associated tightening financial conditions subside."