US consumer prices surge by more-than-expected 0.8 pct in July

Core prices, which strip out energy and food costs, rose 0.3 percent last month, the agency reported.

Most analysts had predicted a gain of 0.4 percent in headline inflation and a 0.2 percent rise in core inflation.

Although headline inflation cooled from a June reading of 1.1 percent, it was higher-than-anticipated as high oil prices continued to buffet the US economy.

Oil prices have, however, declined in recent weeks.

On a 12-month basis, consumer prices rose 5.6 percent in July, marking the biggest annualized gain since January 1991, while the core rate was 2.5 percent higher.