US consumer price inflation rises more than expected in December

Consumer prices rose by 3.4%, up from 3.1% in November and above economists’ expectations of a 3.2% increase. The jump was driven mainly by higher housing costs.

Core inflation - which strips out volatile food and energy prices - ticked down to 3.9% from 4%. Economics were expecting 3.8% growth.

Separately, data showed that initial jobless claims fell by 1,000 last week to 202,000, versus expectations for an increase to 210,000. The previous week’s level was revised up by 1,000 to 203,000.

Commenting on the jobless figures, Neil Wilson, chief market analyst at Finalto, said: "Hardly a labour market shaking under the stress of high interest rates.

"In short: You ain’t getting a March rate cut. It is the kind of print that shouts the Fed does not need to rush to cut this quarter. Disinflation won’t be linear and we think the Fed is going to be rather (perhaps overly) cautious in easing in this kind of environment.

"It’s going to take way, way longer to get to target - if indeed at all - and the market is the wrong side of this reality."