US inflation sees biggest jump since 2008

US inflation surged in April from a year earlier as the economic recovery picked up.

Consumer prices jumped 4.2% in the 12 months through to April, up from 2.6% in March and marking the biggest increase since September 2008.

The report from the US Labor Department comes amid fears that rising consumer prices could push up interest rates.

Some analysts said that the figures could be rising because of temporary factors like supply bottlenecks.

Inflation, which measures the rate at which the prices for goods and services increase, was pushed up by higher prices for cars and food in April.

Prices of second-hand cars increased by 10% in comparison with March - the biggest monthly increase since records began. The Labor Department said that accounted for more than one-third of the overall jump.

The "core price index", which strips out food and energy costs that can be more volatile, increased 3% in April from the year before.

Off the back of the report, US stocks slid. Losses seen around the world on Tuesday extended into Wednesday amid investor concerns that higher inflation could lead the US central bank to raise interest rates more quickly than had been expected.

At the closing bell, the Dow stood at 33,587 after falling 2.0%. The S&P 500 fell 2.14% to 4,063, while the tech-focussed Nasdaq index fell 2.7% to 13,031.

In March, US President Joe Biden signed a $1.9tn (£1.4tn) economic relief bill that saw the government send $1,400 cheques to most Americans, and last month he set out plans for more government spending on jobs, education and social care.

It has led to a build-up of savings which is now being spent as the economy reopens, driving prices higher.