US inflation rises more than expected in September

Consumer prices in the US rose more than expected last month in a sign that the inflation fight in the world's largest economy is far from over.

Inflation, the rate at which prices rise, was 8.2% in the 12 months to September, down from 8.3% in August.

Despite the fall, the figure was still higher than forecast.

Inflation the US is being closely watched as the US central bank's efforts to tame the problem push up the dollar and global borrowing costs.

The rate is well above the central bank's 2% target and means the Federal Reserve is likely to continue to keep raising interest rates in an attempt to cool rising prices.

Inflation in the US has dropped back since hitting 9.1% in June, helped by a fall in fuel prices at the pump.

But the issue continues to affect other parts of the economy, such as housing and medical costs.

Grocery prices have jumped 13% over the past 12 months, and housing and medical costs are also rising sharply.

"The composition of the inflation reading is perhaps even more worrisome than the overall number," said Seema Shah, chief global strategist of Principal Asset Management.

"Increases in shelter and medical care indices... confirm that price pressures are extremely stubborn and will not go down without a Fed fight."

By raising interest rates, the Fed makes borrowing more expensive, a move intended to reduce demand, especially for big ticket items such as cars and homes, and ease the pressures pushing up prices.