US consumer inflation rises to 2%

Gas station
Petrol prices have helped push up inflation in the US

The pace of US consumer price inflation increased in July, pushing the annual rate of inflation to 2% - the rate targeted by the Federal Reserve.

That was up 0.2% from the previous month, with petrol prices still rising.

The US Department of Labor said housing, food and clothing costs all increased, adding to inflation.

Analysts said the figures did not lessen the expectation that the Fed would begin rolling back its economic stimulus measures in the near future.

"There's nothing in [the] release to prevent the Fed from tapering [its stimulus programme], probably next month," said Paul Dales, senior US economist at Capital Economics.

US central bank chairman Ben Bernanke and most of his colleagues view the current low inflation rate as temporary, and see both growth and prices picking up later in the year.

In June, the Fed said it planned to keep the short-term interest rate at a record low close to zero until the jobless rate fell below 6.5% - provided inflation remained under control.

Analysts do not anticipate a rate rise in the near future, but increasingly expect the Fed to begin winding down its asset purchasing scheme, currently set at $85bn (£55bn) a month.

In recent weeks, several members of the Fed's rate-setting committee have suggested the "tapering" of the scheme could begin are early as September.

US industrial production for July came in unchanged, down from 0.2% in the previous month and weaker than the 0.3% expected by analysts.

A 2.1% month-on-month rise in mining output offset a 2.1% fall in utilities output.

But Mr Dales said the figures did little to dent the improving economic outlook in the US, with other survey evidence proving more upbeat.