US inflation climbed to 8.5% in March, highest rate since 1981

War in Ukraine drives up energy costs as figures strengthen expectations Federal Reserve will raise interest rates next month

Prices in the US climbed at their highest rates since 1981, rising 8.5% over the year to the end of March as the war in Ukraine drove up energy costs for Americans, the labor department announced on Tuesday.

The latest Consumer Price Index (CPI) - which measures the prices of a basket of goods and services - comes after the index rose by 7.9% in the year through February, the fastest pace of annual inflation in 40 years.