Prices in the US failed to rise in August or July, according to the Federal Reserve's preferred measure of inflation. The core personal consumption expenditure deflator (PCE) was flat in both months, a marked slowdown from the strong inflationary pressures earlier this year.

The figures vindicate the Federal Reserve's confidence that the increase in inflation in the spring was an aberration and will reinforce expectations that the central bank need not accelerate the pace of interest rate rises.