Stocks slumped after a key indicator of US inflation jumped at the fastest pace in three years in the wake of Donald Trump’s tariff campaign.

US producer prices – a measure of wholesale costs – rose 3.3pc annually in July, which was much higher than forecasts of 2.5pc.

Wholesale prices bounced by 0.9pc in July compared to June, government data showed, which was the fastest growth since 2022 and well above the 0.2pc expected by analysts.

Producer prices measure wholesale inflation and are often a precursor to rises in consumer prices. The data also serves as an early indicator of the impact of president Trump’s tariffs on the US economy.

Stephen Brown of Capital Economics said the data showed “some signs of tariff effects” with underlying wholesale inflation rising at the fastest pace i

See Full Page