US Fed Rate Hike Looms as Markets Shudder Over Inflation Fears

The US Federal Reserve's interest rate-setting meeting has put markets on edge as investors expect policymakers to raise borrowing costs to tackle persistently high consumer prices.

Brent crude futures pushed towards $110 a barrel, while average diesel prices in the United States struck a record high of just under $6.27 a gallon, heaping pressure on President Donald Trump ahead of midterm congressional elections.

Market expectations for a 25-basis-point rate increase have risen sharply after official data published last week showed US annual inflation remaining far above the Fed's target.

The surge in energy costs has ramped up pressure on central banks to raise borrowing costs, with the European Central Bank recently lifting interest rates in the eurozone and the UK economy struggling for growth.