US prices steady

Falling energy prices have fed through to prices

America's inflation fears eased on Tuesday with the news that prices rose at a lower than expected level in April.

The Consumer Price Index, the most closely watched inflation measure, was unchanged in April following increases of 0.5% and 0.7% in February and March respectively.

Analysts had expected a rise of 0.1%.

The US Labor Department said the slowdown was largely attributed to the fall in energy and transport costs - which in turn reflected the drop in the price of oil.

The figures will have been closely watched by policymakers at the US central bank, the Federal Reserve, who decide later on Tuesday how far to raise interest rates to slow the fast-growing economy.

Their reason for slowing it is to reduce the risk of inflation rising.

The Labor Dept's closely-watched core CPI, which strips out the more volatile food and energy components, rose 0.2%, half the previous month's increase.

It is up 2.2% on the year earlier.

The last time the CPI was unchanged was in June 1999.