WASHINGTON, United States (AFP) —  United States (US) consumer inflation surged to a fresh three-year high in May, according to official data released Wednesday, as increased energy prices rippled through the world’s largest economy.

The consumer price index (CPI) rose 4.2 per cent year-on-year, up from April’s 3.8 per cent figure, the US Bureau of Labor Statistics said.

It was the highest reading since April 2023, according to official data, but in line with analyst expectations.

The US-Israel war against Iran, launched in late February, has sent energy prices soaring after Tehran retaliated by virtually closing the vital Strait of Hormuz, through which roughly a fifth of global oil and gas normally pass.

US President Donald Trump has insisted that the price shock will be temporary and that a peace deal will be signed soon, but the soaring costs are a key issue for voters as they head to midterm elections in November.

Trump’s Republican Party will be aiming to maintain their control of both houses of Congress, but will face a stiff test as high prices batter US households.

May’s consumer inflation data showed energy prices had risen 23.5 per cent over the same time last year, with gasoline rising by 40.5 per cent.

Grocery prices also rose significantly for the second month in a row, up 2.7 per cent over a year ago.

Americans have been battered by years of higher-than-expected inflation, with price increases continuing to remain high long after the pandemic.

Core consumer price index (CPI) inflation, which excludes volatile food and energy prices, came in at 2.9 per cent in May, up from 2.8 per cent the month before.

The US Federal Reserve has a long-term two-per cent target for inflation, and the central bank’s rate-setting committee will meet next week to set interest rates.

Markets expect them to keep rates steady at this meeting, but are now pricing in rate hikes for later in the year, spooking equity investors.